Red Sea situation & by-passing Suez Canal:
* Several Ships Carrying cargo were hit by Yemeni Houthis, ships owned mainly by big main liners (MSC, Maerk, Hapag), against which they have all announced to not use Suez Canal until security situation is back in control
* To make things worse one of the Coil-Carrying vessel hijacked en-route to Turkey by pirates near Somalia coast (which happens to be in the same geographical region as well)
* Main liners have recently announced war surcharge/Contingency charge of $1000/ 20ft container, which is applicable for several destination (which used to have cargoes shipped via Suez canal) – It includes Pakistan, Bangladesh, India mainly far east, South Asia etc same is applicable for exports from these regions
* Ships have to adopt to alternate longer routes via Cape of good hope, which will increase transit by 12-15 days, meaning higher fuel usage, and time
* Insurance premiums for cargo and ships are sky rocketing which will be passed on to customers
* It would mean to ship cargo from Europe/UK for Jan would cost $40/mt more for Pakistan/India/Bangladesh
* Supply chain management would become a nightmare, hap hazard changes in tracking results should be expected, Commercial issues are expected to come up related to absorption of this cost between the sellers and buyers
* Previously booked cargoes/contracts will be the first point of attention in early Jan 2024, which means any new business will have to wait before the clarity comes in existing shipment plans which was planned to be shipped in January 2024
China:
– Chinese futures rebounded with D-Bar up 2.64%, HRC up 3%, Coking coal up 0.27%, Iron ore up by 6%
– Spot Iron ore shot up to $140/mt increase of $6.5/mt w-o-w
– Coking coal increased by $20/mt this week to stand at $325/mt
– Spot HRC offers up by 5-7$ last week
– Chinese banks decreased the deposit rates, thus making other investments more attractive for general public other then bank deposits. SHFE reacted positively.
– Vietnam/South Korea/Taiwan scrap import and domestic prices stable to up
Turkey:
– Turkey ends 2nd week without booking, as rebar sales was not healthy
USA HMS is price assesment still at $424/mt for HMS, Sellers not interested to go lower on prices
– Domestic rebar and exports both down by 5-10$
Europe:
– Domestic prices stable in europe, but due to absence from Turks price assesment reduced by $3/mt w-o-w
– India, Pakistan, Bangladesh prices remained depressed though domestic mills supported the pricing.
– Mills trying to pass on the higher costs of finished results awaited once market re-opens in 2024
USA:
– Domestic price remains pretty stable, Flats prices remain pretty tight
– No flexibility shown by US sellers on pricing to any customers globally
Bangladesh & India
Market remained sluggish in India and Bangladesh and the bids came lower compared to last week
Pakistan
* Shredded offers were at $430-435 the offers disappeared in mid of last week due to announcements of war surcharge fee from main lines
* Rebar prices reduced by rebar producers from 5000-8000/mt in last week.
* Re-rollers increased prices for CRC and Galv by PKR5000/mt
* Abrupt changes in customer’s supply chain plans expected due to the changes in routes of shipping lines, shortages and un-expected inventory gapes is one of the possibility for Feb 2024
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