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Vietnam’s HRC market struggles to digest Chinese rebound

The Vietnamese import market was mostly quiet during the past week as buyers are uncertain on how to react to the strengthening in China’s steel futures market. Vietnam’s HRC producer, Formosa Ha Tinh Steel (FHS) lowered its latest monthly HRC prices by around $10/tonne, but it maintained its VND-denominated list prices,” Kallanish hears from market participants.

The mill released last Thursday its non-skin passed SAE 1006 HRC for June/July shipment at the equivalent of $580-590/t cif Vietnam, depending on tonnage. This is the same price level for its SS400/pipe-making grade HRC. The price for the mill’s skin-passed HRC is $5/t higher. 

Formosa’s prices are not fixed, a Vietnamese trader says. “They offer high, but customers can bid lower,” he notes. Tonnages of more than 20,000t of non-skin passed SAE 1006 HRC have a published list price of $575/t cif. Some others say that the prices are too high. “[Any price discounting] depends on how many tonnes FHS can sell at the published price. They will start to negotiate privately if [their] booking record isn’t good enough,” a mill source in Hanoi says.

A recent deal for Chinese SAE 1006 2-3mm thickness HRC (50% 2mm thickness) is heard to have concluded at $540/t cfr Vietnam during the week. The supplier is believed to be short-selling and sold at this level in order to be competitive with Hoa Phat’s recent domestic sales price for June deliveries at around $550/t southern Vietnam. But there are those who are sceptical about this low price. “The offers are crazy. I don’t know how they can offer at such levels,” a Hanoi trader says. Another hears offers for Chinese SAE 1006 HRC for June shipment at $545-548/t cfr.

Offers for 3-12mm Q235B HRC from China are rising. A trader received an offer for shipment by end-June at $528/t cfr Vietnam, up from $525/t cfr the day before. “There is very little interest at this price level,” he says. Demand is still weak in the country and inventories are high, he adds. Offers were around $515/t cfr during the week through 7 April.

“There are few bookings now,” another trader says. People need to time to adjust to the new prices,” he adds. 

Kallanish assessed SAE grade 2-2.7mm thickness HRC at $545/t cfr Vietnam, down $5 on-week.

Source: Kallanish