Feng Hsin Steel, Taiwan’s largest rebar producer headquartered in Taichung, Central Taiwan, cut its scrap and rebar prices, both by TWD 300/tonne ($10/t) on January 31 and February 3 respectively, as downstream buyers have been expecting for further price declines amid recent drops in iron ore and scrap prices, a company official confirmed on February 5.
“We have not received many new orders yet since our rebar price cut on Monday, as downstream buyers are waiting to see whether scrap and iron ore prices will slip down further, so now we are just focusing on fulfilling the signed deals,” he said.
With the latest adjustments, the mini-mill’s 13mm dia rebar list price, thus, dipped further to TWD 15,300/t ex-works, and its procurement price for locally-sourced HMS 1&2 80:20 scrap falls further to TWD 7,200/t, Mysteel Global understands from its own recorded data.
As of February 4, Mysteel’s 62% Australian Fines SEADEX was at $82.6/dmt CFR Qingdao, down substantially from $95.50/dmt CFR Qingdao as of January 23, the last working day in China before the CNY holiday.
An official from a mini mill in South Taiwan also noted the market hesitation in buying rebar now because of the uncertainties in the global scrap and iron ore prices.
“China’s Novel Coronavirus outbreak has caused concern in Taiwan’s steel market, as we do not know whether or how much more raw material prices will soften in the near term, and secondly, we do not know whether Chinese steel products will try to find the way out to export if the domestic demand does not recover for some time, and that will directly hit rebar producers in Taiwan,” he said.
The official disclosed hearing imported scrap dealing price at below $240/tonne CFR Taiwan for better quality supplies than the HMS 1&2 80:20 scrap, while the latter was traded at around $255/t CFR prior to the Chinese New Year (CNY) holiday.
For the time being, steel mills in the Chinese mainland are faced with mounting finished steel stocks and some have opted to idle some of their rolling mills to reduce the output, and both downstream demand and steel transportation have been disrupted because of the CNY holiday over January 24-30 and then the virus outbreak nationwide in late January.
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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