IMO 2020 – Significant Freight-rate Rise To Put High Pressure on Steel Exporters

The significant rise in global freight rates caused by tightening emission control regulation from the International Maritime Organization (IMO) started on January 1, 2020 to help reduce air pollution from global ships is putting high pressure on steel exporters.

In particular, the marine sector consumed about 3.8 million barrels of fuel each day in 2017, which made it responsible for 50 percent of the global demand. The bulk of this fuel was high sulfur fuel oil (HSFO), which produced sulfur emissions of between 1% m/m and 3.5% m/m when consumed by most shipping liners. Getting emission levels to under 0.5% m/m will require a large commitment from the shipping industry.

Nevertheless, as IMO 2020 announced, the ships can only use marine fuels with a sulfur content of not more than 0.5% when operating outside Emissions Control Areas (ECAs). The current sulphur content limit is 3.5%. ECAs include the Baltic Sea, the North Sea, the North American ECA (which includes most United States and Canadian coastlines), the US Caribbean ECA (which includes Puerto Rico and the US Virgin Islands, Fastmarkets has learned.

https://mrssteel.com.vn/imo-2020-significant-freight-rate-rise-to-put-high-pressure-on-steel-exporters/

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Vietnam Tightens Regulations on Determining Goods Origin.

Recently, Vietnam has become a member of many free trade agreements with many strategic areas, and most recently, especially CPTPP, EVFTA, … Because of these FTAs, Vietnamese goods have been enjoy tax incentives and more. 

In addition, the trend of using trade remedies to protect domestic production is used more and more. Markets that impose tax on each other and in combination with Vietnam’s tax exemption for potential markets will cause many factories and trading companies to commit frauds and fake certificates of origin goods (C/O) of Vietnam, labeling goods abroad before importing them to Vietnam for consumption and group of acts of cheating, counterfeiting C/O Vietnam, illegally conveying for export to enjoy preferential tax rates.

The General Department of Customs has zoned 15 groups of goods at risk of fraud, counterfeiting C/O, including steel products.

https://mrssteel.com.vn/vietnam-tightens-regulations-on-determining-goods-origin/

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Vietnam Has The Best Steel Mill for Sharp Increasing in Indonesian Steel Demand

Indonesia is 10th-largest steel importer all over the world (2017 ranking). In 2018, Indonesia imported 11.6 million metric tons of steel, a 1 percent increase from 11.4 million metric tons in 2017. Indonesia’s imports represented 3 percent of all steel imported globally in 2017, International Trade Administration said.

In addition, Indonesia’s steel demand is expected to increase by 7-9% per year over the next few years, as VITIC/Reuters announced recently.

Particularly, Aloysius Maximilian, general manager of Gunung Raja Paksi, forecasted that the country’s domestic steel demand would reach 16 million tons

https://mrssteel.com.vn/vietnam-has-the-best-steel-mill-for-sharp-increasing-in-indonesian-steel-demand/

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HRC Price in Europe Market Continues To Slow Down

Hot Rolled Coil (HRC) price in Europe (EU) market continues to slow down and many buyers expect the price to fall further more. Therefore, most of reservation has been delayed, caused a negative trend in the fourth quarter of 2019.

In particular, as Fastmarkets’ weekly price assessment for domestic HRC, EXW in Northern Europe was €450-460 ($491-502) per ton on September 25, down by €5-10 per ton in week and down by €30-35 since the beginning of the third quarter 2019. Besides that, EXW in Southern Europe was €420-440 per ton on September 25, down by €10 per ton in week and down by €45-50 per ton since the beginning of July. 

The lower end of the assessment represented in Italy while the upper end reflected prices in Spain. Currently HRC steel prices imported to Italy are lower than domestic mills. Domestic suppliers try to stabilize market share and operate at full capacity to produce HRC steel in October 2019.

https://mrssteel.com.vn/hrc-price-in-europe-market-continues-to-slow-down/

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EU Has Changed Some Regulation Related to Safeguard Measure

August, 2018, after a few month after 25% import duty under Section 232 that issued by USA, EU slapped Safeguard duty on 28 kind of steel product to protect its domestic factories. These actions made a strong wave for world steel market and there are a lot of market imposed new anti-dumping duty or safeguard duty and Trade defense become a best tools to ensure domestic production is not affected.

But in 27, September, 2019, the Official Journal of the European Union has issued a Commission implementing regulation that related to Safeguard measure against imports of certain steel products

The Commission has intended to change tax rate from 25% to 20%, but through this review investigation, they defined that there are more injuries are found and need to change some rules.

Under WTO Regulation, the if the import volume of developing countries smaller than 3%, the plaintiff can not apply Safeguard duty. But after this review investigation, there are some developing countries are subject to taxes, including Vietnam with 4 products: Non Alloy and Other Alloy cold Rolled Sheets, Metallic Coated Sheets, Stainless Cold Rolled Sheets and Strips, Other Seamless Tubes. 

https://mrssteel.com.vn/eu-has-changed-some-regulation-related-to-safeguard-measure/

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Vietnam HRC Imported Price Continues to Move Downwards

In the first week of October 2019, Indian decreased their offer for Vietnamese market. Latest offers were at 440 – 445 usd/ton CFR Vietnam for HRC SAE 1006 2mm, which were down around 15 usd/ton from 455 – 457 usd/ton last week. Heard there were spot lots around 5,000 mt signed at 440 usd/ton for October shipment. Buyers are expecting lower price and bidding at 535 usd/ton.

Russia HRC offers were also down around 15 usd/ton compared with two weeks agon. MMK offered big coil at 535 usd/ton for and small coil at 525 usd/ton for CFR Vietnam for early January shipment. However, compared with level 437 usd/ton CFR was made for December shipment, Vietnamese customers are still waiting for further discount. 

With national holiday mood, Chinese suppliers are out of market this week. Next week, when China comes back to work, market situation will be changed a lot.

https://mrssteel.com.vn/vietnam-hrc-imported-price-continues-to-move-downwards/

Philippines is a big islands nation that located in the East of SouthEast Asia. According to statistics, the Philippines is the 17th largest import country in the world, with an output of 9.1 million tons in 2018. This proves, the steel consumption in the Philippines is quite high.

The reason for this is due to the geography of the Philippines. The Philippines is an archipelago located in the unstable crust area, frequent earthquakes, tsunamis and typhoons.

Each time a disaster occurs, the construction works in this country are also difficult to sustain and often need to be rebuilt. It is for that reason that almost no investor dares to invest in building steel factories in this country.

Because there is no domestic production and often rebuilding constructions, the Philippines has to import steel almost to meet domestic demand.

According to the regulations of the Government of the Philippines, to be imported, products require a certificate of conformity to this country’s standards. The Philippines standard system is the PNS system, which is now mandatory for some steel products such as Galvanized, Pre-painted Galvanized, Galvanized pipes, tubes, etc.

https://mrssteel.com.vn/philippines-philippines-standard-ps-quality-new-destination-for-vietnam-steel/

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