Vietnam’s 7.1mtpa capacity steel producer Formosa Ha Tinh (FHS) last week booked an order for delivery of 1,00,000 t HRC to China at USD 472-475/t CFR basis for early Sep’20 shipment.
Vietnam’s HRC sale to China is the first ever such transaction, as Vietnam is one of the world’s largest HRC importers and a big market for Chinese HRC.
China has turned to importing HRC from several countries, including India, over the past few months as manufacturing and construction demand ramped up quickly since the lockdown was lifted in March, leading to strong demand and high domestic prices of HRC, making imports viable.
China is the world’s largest steelmaker and it is highly unlikely it would continue to keep importing large volumes of a basic product, like HRC, for a long time, but for now China’s imports have provided a welcome market for major steel producers as domestic demand in key steel producing countries recover slowly from coronavirus-related restrictions.
Formosa had last week lifted its domestic HRC prices by $10/t on a CFR-equivalent basis. HRC (SAE 1006, skin pass) was offered at $465/t CIF basis and non-skin pass grade was offered at $460/t CIF basis for Sep’20 shipments.
Chinese steel mills had aggressively imported HRC from India, with total shipments of around 0.74 mn t in Q1FY’21 against 0.03 mn t in Q4FY’20, as per bulk HRC shipment data. Demand has since slowed due to political tensions between the two countries.
Indian steel mills have increased HRC export offers by $10-15/t to around $475/t CFR for Sep’20 shipments this week.
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