Asia will be hit by "steel tsunami" very soon

The looming cut in China's export rebates from 13% to 9% is likely to drive prices up in the coming months.

Asia will soon be hit by a "steel tsunami," as an analyst in Vietnam recently said. “We are already seeing this effect now as India is the only supplier of HRC to Vietnam,” he said.

Vietnamese buyers have no choice but to order HRC shipments from major Indian steelmakers in the absence of supplies from China because Chinese steelmakers were hesitant to ship export shipments ahead of a policy change rumored to begin April 1st for all steel goods. ...

Major Indian steelmakers have tried to capitalize on this and have steadily increased their offer prices due to strong demand from regional buyers.

“The gap between Asia and Europe should close, especially with European buyers willing to pay more for imported HRCs,” an Indian source said.

Buyers in Northern Europe purchase HRCs at 770-800 EUR (908-943 USD) per tonne CFR, while buyers in Vietnam buy at 805 USD per tonne CFR - a gap of approximately 103-138 USD per tonne.

Increasing freight rates
Chinese sellers are rushing to book ships for their cargo ahead of an impending policy change, which has spiked freight rates.

“Freight rates have risen so much that it is very difficult to close any deals based on CFRs,” a seller's source working with South Korea's HRC told Fastmarkets.
According to him, the cost of transporting HRC from South Korea to Southeast Asia is about $ 60-80 per ton.

“If South Korean steel mills offered any kind of HRC, it would make land prices around $ 860-880 per tonne in Southeast Asia,” he said.

And the blocking of the Suez Canal has caused chaos, sparking rumors of further increases in freight rates around the world.

“I expect freight rates to remain high in the second and third quarters of 2021. Shipping companies have already started raising freight rates because global container trade flows have already been hit, ”said an East Asian scrap trader.

Iron Ore Shortage
Operating problems and heavy rains in Brazil are affecting iron ore supplies, supporting higher fines prices with 65% Fe.

A trade source in Singapore said seasonal rains in Brazil affected iron ore flowing into ports, resulting in reduced supplies of high quality Karajas iron ore fines (IOCJ).

High quality iron ore prices may also remain high�