Posted on 30 Apr 2021
East Asian long product import markets are muted after China officially announced that export rebates for most steel products will be completely revoked effective May, Kallanish notes.
Regional market participants, who had been awaiting the formal announcement for months, are expected to take the next 1-2 weeks to assess how the rebate cancellation will impact regional pricing and longer-term supply.
“We are holding offers now; we need to see how mills and customers react,” a leading Chinese company's trader said on Thursday. “Mills want to see to outstanding orders rather than make fresh offers,” a Singapore trader says. He expects construction steel prices to go up because domestic markets in ASEAN and China are strong.
A leading Chinese mill was offering theoretical-weight rebar at $820/tonne fob China on 26 April. Freight to Singapore is around $30/t.
Chinese actual-weight rebar is currently offered at $840/t cfr Hong Kong, up $30/t on-week. Turkish theoretical-weight rebar, which has recently been more competitive than Chinese material, is offered at $650-655/t fob Turkey. An offer was heard at $690/t cfr Singapore on 26-27 April. Traders expect Turkish rebar prices to exceed $700/t cfr Singapore soon given that prices of Chinese rebar exports and scrap are expected to be firm.
Singapore importers are not showing buying interest. “They need to digest the news of the rebate,” a trader says. A clearer picture could emerge by mid-May after the long Chinese Labour day holiday, he adds. Kallanish has raised its weekly BS4449 500B 10-40mm diameter rebar price assessment to $690/t cfr Singapore theoretical weight, up $20 week-on-week.
In Manila, a deal for over 5,000 tonnes of Indonesian 6.5mm diameter SAE1008 blast furnace wire rod was heard on 27 April concluded at $745/t cfr. Offers were around $730/t cfr last week and a deal was heard transacted at $725/t cfr Manila. In Thailand, Malaysian blast furnace 6.5mm diameter wire rod is offered at $770/t cif. Small tonnages of Indian 5.5mm diameter wire rod closed at $720-730/t cif last week.
Kallanish raised its SAE 1008 6.5mm diameter wire rod assessment to $745-750/t cfr Manila on Thursday, up $25 on-week.
Source:Kallanish
