Philippine wire rod import market lacks direction
Exporters have raised offer prices for wire rod in the Philippines this week, Kallanish notes. This is in tandem with increased optimism that regional steel markets would mirror the firming Chinese steel market. However, a drop in the Chinese domestic billet market on Thursday reflects the volatility in markets.
Traders are offering 6.5mm SAE 1008 blast furnace regional wire rod for September/October shipment at $580-585/tonne cfr. Last week, small 1,000-3,000t cargoes of regional wire rod transacted at $570/t cfr Manila.
“The market is very quiet,” a Manila trader says. He and others say that rising political tension between mainland China and Taiwan is the latest negative factor affecting trade.
Blast furnace wire rod from Indonesia and Malaysia were offered on Tuesday at $560/t fob and $550/t fob respectively, a Chinese trader says. The mills were planning to hike prices further but, with the retreat in Chinese steel futures, he thinks they will now lower prices. The backslide in Chinese futures is due to the conflict with Taiwan, he says. The above-mentioned Malaysian wire rod is offered at $585/t truck-delivered to Singapore, a Singapore trader reports.
Another Manila trader hears but is unable to confirm an order for regional wire rod at $575-580/t cfr Cebu. This is a workable price level “given what has transpired the past few months and the current global economic and geopolitical atmosphere, that can change very quickly,” he observes. Mills and traders continue to sell on the basis of "whoever blinks first loses," he adds. This means whichever party urgently needs to buy or sell must compromise.
Kallanish assessed SAE 1008 6.5mm diameter wire rod on Thursday at $570-575/t cfr Manila, up $2.5/t on-week.
On Thursday, domestic billet in Tangshan slipped by CNY 50/t ($7/t) to CNY 3,710/t after gaining CNY 210/t since 28 July. Thursday's price drop deters import buying, Chinese traders say. A regional trader reports hearing the latest bids from China for billet imports at $495/t cfr, adding that no bookings have transpired yet. Several traders heard Iranian billet, possibly 50,000 tonnes, was ordered at $510/t cfr China during the recent price rally.
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