Posted on 07 Sep 2022
ASEAN blast furnace mills are turning to export markets in order to soak up their production amid a very sluggish regional market, Kallanish notes.
An Indonesian mill’s recent large-tonnage export order to Europe was widely discussed among market participants early this week. The same mill as well as a Malaysian producer have also started exporting wire rod to Europe. The mills have previously been exporting to China to offset weak regional demand. But this is no longer an option, with China struggling with weak domestic steel consumption.
The Indonesian mill is heard to have sold around 100,000 tonnes of 3sp grade billet for October shipment to Europe and Africa at under $520/tonne fob, regional trading sources report. A Manila trader heard on Monday that a 30,000t cargo was booked at $515-520/t fob to Poland and Germany. A Singapore trader reports hearing that the mill sold 20,000t at the end of last week to Africa. Traders also report the Indonesian mill increased on Tuesday its billet export price for November shipment to $530/t fob.
The Indonesian and Malaysian mills are heard to have exported wire rod to Italy and Spain recently despite the higher freight costs to these long-distance destinations. “Production costs are rising in the EU because of power shortages,” a Singapore trader notes. Traders were offering wire rod from the Malaysian and Indonesian mills last week to the Philippines and Thailand at around $560/t fob.
"Offers appear to be scarcer these days," a Manila trader said on Tuesday. He guessed that this is "because Europe has been buying billet and wire rod from Asia lately."
Source:Kallanish
