The imported HRC prices in Vietnam have rallied with prices increasing by $15/t w-o-w. With deals getting concluded at increased offers, the market turned active and sentiments bullish. A confirmed deal of 10,000-15,000 t HRC (SAE 1006) heard from a Chinese mill at $550-555/t CFR Vietnam for end-Dec shipment.
Factors driving the imported HRC offers to Vietnam-
- Improved demand for HRC in Vietnam- Vietnamese importers have started showing interest in imported HRC for the past couple of weeks after observing the trend amid rising offers. The Vietnamese downstream industries have been on a better recovery path after the COVID infection concerns subsided a month earlier.
- Improved demand in China and strengthening RMB- The Chinese mills have been enjoying better demand and margins in the domestic market. Along with this, the continual future market gains and strengthening RMB against $ resulted in an uptrend in Chinese export offers for the past couple of days. 1 USD is currently trading equal to 6.59 RMB which was seen at 6.7 levels a week ago.
- Limited supplies from India- Indian steel manufacturers have remained less active in exports amid improved demand in the domestic market. Recently only a few mills are heard offering at $555-560/t CFR Vietnam basis for Jan-Feb shipments. However, no major deals have been concluded.
Outlook- Vietnam’s second-largest domestic player, Hao Phat was also heard quoting offers in the merchant market with deals concluded for Nov-Dec deliveries at prices varying between $510-525/t depending on the region and customers. Thus increased domestic supplies may reduce reliance on imports at higher prices in Vietnam.
Also, Formosa Ha Tinh is anticipated to revise domestic offers around mid of this month. Currently, the mill has been offering skin pass HRC at $535-540/t CIF basis.
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