Market participants in Indonesia were concerned about slow domestic demand, even as import quota restrictions did not allow them the option to book relatively cheaper Chinese HRC when Asian prices had dropped.
"There are some customers who have the view that there isn't enough volume in the local market, but we think there is," an Indonesian mill source said. "If there is too much of imports, prices in the local market will also come down."
Chinese HRC is typically imported under the alloy steel category, given the reluctance of the Indonesian government to liberally issue import quotas.
"Our stock level is low and we would like to buy. But the Japanese price is nearly $580/mt CFR, which is impossible for us, especially as the government is very strict in giving import quotas," a Jakarta-based buyer said.
Vietnam-based exporters of downstream steel material, such as galvalume and galvanized products, were "very hungry for orders" and "can deliver within three weeks" on account of various anti-dumping measures on Vietnamese products globally, the buyer said.
The Vietnam Steel Association, or VSA, was also heard to have written to Indonesia's Minister of Trade to increase opportunities for Vietnamese steel exports. But this could not be confirmed directly with the VSA.
"Buying power is not so strong. [Automotive] demand dropped 50%," an Indonesian steel service executive said.
Indonesia's parliament is on the verge of approving a sweeping coronavirus stimulus package. However, sources pointed out that the infrastructure spending may remain subdued.
Local HRC producer Krakatau Steel was also heard to have increased local HRC prices, even though it was not fully back on steam with its capacity utilization.
"Quite confusing between the price from the supplier and the bids from the buyer," an Indonesian pipe-maker source said. "The mills here raise their prices, but most of the customer still ask for a lower price."
The slowdown comes following a slate of new lockdown measures put in place to curb the spread of the coronavirus, which saw a city-wide lockdown re-imposed in Jakarta Sept. 14. On Sept. 25, Jakarta further extended movement restrictions for another two weeks as the cases continued to rise.
-- Ashima Tyagi
