Posted on 12 Nov 2021
Long products import market direction in Southeast Asia is unclear after a strong rebound in the Chinese steel futures and physical markets, Kallanish notes. Market sentiment had been very weak at the start of this week.
A trader’s offer for theoretical-weight open-origin rebar for future delivery at $660-670/tonne cfr Singapore on Monday drew attention in the market. The offer is for shipment during May 2022-November 2022 at seller’s option.
This offer price could reduce prices for spot cargoes for December/January shipment to under $700/t cfr Singapore, a local trader says. “These traders are driving down prices and destroying values,” another says. A similar forward delivery cargo was booked at end-October at $700/t cfr for shipment in March-October 2022.
Offers for spot cargoes from the Middle East were holding firm at $740-745/t cfr Singapore on Wednesday. Buying interest for spot cargoes would be at around $20-25/t lower, some traders say. Kallanish assessed BS4449 500B 10-40mm diameter rebar at $720-730/t cfr Singapore theoretical weight, down $15 on-week.
A Hong Kong importer has not heard of any spot rebar purchases since prices for forward deals started falling. An offer for actual-weight rebar of open origin for November 2022 delivery was indicated at $700/t cfr Hong Kong. Noting that the volatile SHFE market has gone up, he does not think the low-priced offers for forward deliveries would be available now.
Meanwhile, traders report that Malaysian blast furnace 6.5mm diameter wire rod was offered at $715/t cfr Manila and at $725-730/t cfr Bangkok, but garnered no buying interest. "I only got a bid at $690/t cfr," a Thai trader says.
Market sentiment improved after the Chinese futures market reached its daily upper trading limit, a Manila trader said on Thursday. An offer for open origin wire rod for February shipment is tagged at $725/t cfr Manila. "Nobody will buy into the hype of a Chinese market ‘rebound’ in one day," he says, adding that many offers are unchanged.
A 2,000-3,000-tonne cargo of Indonesian blast furnace 6-8mm diameter wire rod sold at $730/t cfr Kaoshiung early this week. People are watching the situation in China closely but it is not easy to read, a Taipei trader says. Kallanish assessed SAE 1008 6.5mm diameter wire rod on Thursday at $715-720/t cfr Manila, down $20/t on-week.
Source:Kallanish
