Asia will soon be hit by way of a “steel tsunami”, a veteran trader in Vietnam instructed Fastmarkets recently, with combining factors expected to keep prices high to the second and third quarters of 2021.
Looming Tiongkok export rebate cut
Your looming export rebate cut in China, possibly by 13% to 9%, may occur keep prices higher from the coming months, he reported.
“We are already viewing this effect now, with India being the only supplier of HRC to be able to Vietnam, ” he mentioned.
Vietnamese buyers have no choice but to book HRC cargoes from major Indian steelmakers inside the absence of supplies from China, because Chinese steelmakers have been hesitant about export cargoes in front of the policy change, which has become heavily rumored to start on April 1 for many steel products.
Major Indian steelmakers have been keen to capitalize on this subject and have been progressively raising their offer prices on strong demand from regional buyers.
“The gap between Asia and Europe has to narrow, especially with European buyers willing to pay a premium for imported HRC, ” a new seller source in India shared with Fastmarkets on Friday Walk 26.
Buyers in north Europe have been purchasing HRC at €770-800 ($908-943) every tonne cfr, while clients in Vietnam are obtaining at $805 per tonne cfr - a gap of all over $103-138 per tonne.
There have also not necessarily been any wire fishing rod or offers from China due to possibility of a kickback cut, while Chinese mills are aiming for more than $700 every tonne for rebar exports to help Singapore.
Soaring freight charges
Chinese sellers have also been rushing to book vessels to handle their cargoes in front of the impending policy change, inducing freight rates to rocket.
“Freight rates have increased so much that it is rather hard to conclude any deals on the cfr basis, ” any seller source handling Southwest Korean HRC told Fastmarkets.
He or she said freight costs had been about $60-80 per tonne to be able to ship HRC from Southern region Korea to Southeast Parts of asia.