Imported HRC prices in Vietnam edge closer to five-year high in recent bookings from China

Tight supplies of HRC, improved downstream demand from galvanized and color coated producers in Vietnam have resulted in a steep hike in offers this week. Imported HRC offers from China have hit highest since Mar’16, since the data maintained with SteelMint.

Vietnam importers book over 70,000 t, prices rise sharply

• Baosteel has concluded a 10,000 t HRC export deal for Vietnam towards end of last week at $640-645/t CFR basis for Mar’20 shipment, SteelMint learned from its trade channels.
• Baosteel has booked 30,000 t HRC (SAE 1006) for exports to Vietnam last week at $626-628/t CFR basis for Feb ‘21 shipment, sources reported SteelMint.
• Major Japanese steel mills reported to have booked around 30,000 t HRC to Vietnam at $635/t CFR for Jan’21 shipments, SteelMint learned from its market channels.

Factors behind sharp hike in offers:

1. Chinese HRC export offers continue to rise further- Chinese steel mills continue to raise their HRC export offers on strong domestic prices. Chinese HRC export offers are hovering at $645-650/t CFR basis. Strong domestic prices on higher futures led to hike in nation’s export offers. This resulted in to jump in imported HRC offers to Vietnam

2.Active bookings from China in absence of Indian supplies: Vietnam steelmakers are majorly procuring HRC from China since offers from other exporting countries are at premium levels. Indian mills are not offering HRC to Vietnam on limited allocations and improved sales in domestic markets. However few export deals have been reported to have concluded for Europe. Meanwhile Japanese and South Korean mills are offering on the higher side. Thus Chinese offer is considerably a viable option for Vietnam end-users.

3.Improved downstream demand – Vietnam steelmakers majorly produced galvanizing and color coated products. Thus it seems despite improved domestic supplies from Hoa Phat, the gap between demand & supply has widened for which imports remain the only option.

Outlook – Market awaits price revision for Vietnam’s domestic mill – Formosa Ha Tinh which may further add clarity to Vietnam’s domestic price trends. However, imported HRC prices are likely to remain strong in the next one week, sources expect.