Posted on 15 Mar 2023
Domestic prices in the ASEAN construction long products market are weak. Subdued demand continues to depress the market and this is affecting offtake for imported billet and raw materials, Kallanish notes.
In Singapore, domestic theoretical-weight rebar prices are prevailing at SGD 900-920/tonne ($669-684/t). “There are some stockists which are trying to sell at higher levels. The market is quiet because of market uncertainties,” a Singapore trader says. The latest import offers for rebar are prevailing at around $660/t cfr.
The approaching Thai general elections in May could be a factor for the market slowdown, a Bangkok trader notes. Thai EAF mills' rebar is pegged at THB 22.80/kg ex-mill ($661/t). “Mills are aiming to hike prices by THB 500/t ($14/t) or more. But they are not in a rush to sell and buyers are also not in a hurry to restock,” another trader says. Low-carbon wire rod prices are prevailing at around THB 500-1,000/t higher than rebar, he adds.
Market chatter that Iranian billet was booked two weeks ago at $605/t cfr Thailand is met with some scepticism. Traders understand that Iranian billet was booked at $595/t cfr at that time. “Even at $595/t, re-rollers will at best break-even because rebar prices are too low,” a Thai trader says.
The market in Indonesia is quiet and sluggish. Domestic rebar prices are at the equivalent of $655-665/t ex-mill. There is market anticipation that the finished steel market will soon dip because of the approaching Ramadan and Eid holiday. “Construction activities will slow down, so finished rebar sales will similarly fall,” a regional trader says. “The market dives during the [Eid] holiday month,” a Jakarta mill manager says.
Rebar demand is similarly sluggish in the Philippines. “One reason is the supposed slowdown in the construction of residential projects. Offtake slows down as inflation and higher interest rates begin to bite,” a Manila trader says. “It is very bad, especially for the 3sp grade segment,” another says.
5sp grade rebar, which is used in tall buildings, is less affected because projects for high-rise buildings are still proceeding. Nevertheless, the weak rebar market is dampening billet import demand. “Nobody wants to take the risk in buying billet at the current price of $640-645/t cfr Manila,” the second trader adds.
“Raw material prices are going up but mills cannot increase their finished steel prices,” a Vietnamese mill manager notes. “Demand in Vietnam is too weak.” Domestic rebar prices are “stuck” at around $700-710/t, he concludes.
Source:Kallanish
