Posted on 06 Dec 2024
The construction steel markets remain depressed in ASEAN, with weakness in China due to a weakening yuan and domestic demand which are likely to encourage Chinese steel exports. Kallanish notes.
A leading Indonesian mill has again lowered its 3sp 150mm billet official prices to $455/tonne fob effective 4 December, down from $465/t fob on 29 November.
Its official wire rod price was also lowered by $5/t to $485/t fob over the same period. Both products are for shipment by end-February. The mill reduced its slab offer to $455/t fob from $458/t fob for shipment by end-January.
In Vietnam, a leading mill decreased the domestic price of its rebar by VND 250/kg ($10/t) and VND 200/kg for wire rod on 5 December. The mill’s export offer for theoretical-weight rebar was at $485/t fob on 2 December which would be about $510/t cfr Singapore.
The regional longs markets have been very quiet and prices for construction steel and billet are correspondingly low.
Chinese domestic steel demand has been hit by the lack of demand and support from the Chinese authorities, a trader says.
“I think iron ore is relatively high and there is room for prices to fall by at least $10/t which could trigger steel prices to fall further,” a Chinese trader says.
“China is also heading toward the Chinese New Year (late January 2025) and we are also approaching the year-end holidays too,” he adds.
“[There is] clearly no chance of a revival in the year-end,” a regional trader says. He estimates Chinese steel exports are “going to be at an all-time high…surpassing 110mt.”
Others are also concerned that the steel markets will worsen next year when US President-elect Donald Trump assumes presidency.
“I worry that Trump may inflict some damage to the world steel market,” a regional mill manager says.
Meanwhile, offers for mesh-grade 6.5mm and up diameter Chinese wire rod for January/February shipments were still around $480/t cfr Manila, similar to last week. These imports are believed to be Chinese exports which may evade full payment of VAT.
Kallanish assesses SAE 1008 6.5mm-diameter wire rod at $475/t cfr Manila, down $2.5/t on-week.
Source:Kallanish
