The continued weakness in China’s steel futures and spot markets is depressing sentiment for rebar in Singapore and Hong Kong. Buyers expect that the current slide has not bottomed and most are staying away, Kallanish understands.
Malaysian theoretical-weight rebar offered at $545/tonne trucked to Singapore has not been taken up. Its wire rod is also offered at the same price level trucked to Singapore. These delivered prices are equivalent to $540/t cfr Singapore.
The market has turned very bearish this week when iron ore prices went into free-fall, a Singapore source says. There is market talk that the mills still need to fill up their April orderbooks. But this deters end-users from placing their orders now. China will have to export but this time there are the ASEAN mega steel mills, which are also Chinese owned, competing with them, the source adds.
The same Malaysian mill is also offering actual-weight rebar at $545-550/t cfr Hong Kong but Chinese rebar is more competitive. A cargo for 5,000-10,000t of Chinese actual-weight rebar was booked earlier this week at $542-545/t cfr Hong Kong. Of this cargo, a small tonnage was booked by a trader.
The Hong Kong market currently has high stocks of imported rebar, a Hong Kong importer says. Of these stocks, half were booked for forward deliveries at $550-555/t cfr last year.
Kallanish assessed BS4449 500B 10-40mm diameter rebar at $540-545/t cfr Singapore theoretical weight, down $12.5 on-week.
Source: Kallanish
