Posted on 24 Jun 2022
Traders are taking a leading role in the falling ASEAN wire rod import market, Kallanish notes. They are driving the market lower by shorting. Mills are less active in giving offers because current prices are deemed too low.
Offer prices for wire rod into the Philippines are tumbling down quickly. Certain traders are giving offers for 6.5mm diameter blast furnace SAE 1008 wire rod from China for August shipment at $655-660/tonne cfr Manila. This is a hefty $50/t slump from last week’s low-priced offers for Chinese wire rod at around $710/t cfr.
Some trading sources however say the market has not yet fallen this low. “Customers are asking for this level but offers are not here yet,” a Manila trader says.
Regional ASEAN wire rod offers have not fallen as sharply. But there are lower quotes in the Philippine market. A Manila trader last heard offers late last week at around $700/t cfr. “I haven’t heard of any this week presumably because of the cheap Chinese offers,” he says. The suppliers behind the offers are short-selling, he says.
Malaysian same grade and diameter wire rod is offered at $690-695/t cif Thailand. But a Thai trader says transaction prices could be lower. “Mills may need orders for survival,” the trader observes. Some Vietnamese trading sources report that Vietnamese blast furnace wire rod is currently offered at around $630/t fob. Freight to the Philippines is estimated at around $45/t.
The current prices do not make sense, a Vietnamese mill manager says. “Because the current price level is a loss for everyone. It is better not to sell, but some mills just have to sell,” he says. He is unsure of the extent of these mills’ “loss tolerance”.
Kallanish assessed SAE 1008 6.5mm diameter wire rod on Thursday at $680/t cfr Manila, down $30 on-week.
Source:Kallanish
