Imported HRC offers for Vietnam hit over 2 years high – SteelMint Data

Vietnam’s imported HRC market has witnessed a steep price rally this week. Imported HRC offers for Vietnam have hit nearly two years high, as per data maintained with SteelMint. Current offers for rerolling grade (SAE 1006) from China are hovering at $590-600/t CFR. Similar levels were last recorded in Sep’18.

Factors driving the imported HRC offers to Vietnam-
1. Futures rose sharply last week – Robust gains in China’s futures resulted in higher domestic prices and export offers. SHFE HRC Jan’21 futures contract closed at RMB 4,084 as on 20 Nov’20 which was around RMB 3,970 as on 13th Nov’20. However, today futures has come down by RMB 73.

2. Limited export allocations from India – Indian private steel mills have continued to remain inactive in export market by limiting their allocations. There were indications for Indian origin HRC at $585/t CFR last week. However, no major deals were concluded. Also, mills are eyeing a further hike in export offers on limited allocations, highlighted traders.

3. Japanese/Korean mills raise  HRC export offers- Major Japanese mills have raised  HRC export offers significantly by $40/t and are offering around $640/t CFR basis. Japanese mills have been gradually lifting their output and restarting their furnaces one by one. Meanwhile  domestic steel demand especially from the auto sector seems to be outpacing the growth in demand, and so the country’s steel exports remain limited thus increasing the offers.

Deals concluded last week:

• China’s major steel mill – Baosteel has concluded a 10,000 t HRC deal with a Vietnam-based galvanized and color-coated steel producer. The deal price was heard at $580/t CFR basis
• Chinese steel mill – Benxi has concluded a 20,000 t HRC export deal with Vietnam-based galvanized and color coated steel producer. The deal has been concluded at a $585/t CFR basis

Current offers for imported HRC (SAE 1006)

Hoa Phat’s HRC orders exceeds 200% of its production capacity – Hoa Phat reported that its HRC orders have exceeded 200% of the company’s production capacity with strong demand from domestic and overseas markets. The company received an order volume of 140,000 t for Jan’21 while at that time, it could only supply 70,000 t due to reserved parts for internal use.

Outlook: Limited supply of imported HRC amid absence of Indian cargoes and premium price of East Asian countries will keep higher prices supported in the near term.