Key Highlights:
- Resurgence of Covid- 19 cases
- Tet/Lunar New year holidays
- Hoaphat offers HRC at competitive prices
Imported HRC offers to Vietnam slumped further by around $10-20/t on a weekly basis. Resurgence of COVID in Vietnam along with the upcoming Lunar and Tet holidays in Vietnam and China has resulted in low business activities amid bearish market sentiments.
Factors attributed to continual fall in imported HRC offers are:
1.Resurgence of Covid-
According to a local news website in Vietnam, Vietnam recorded 14 new cases of COVID-19 infection on Sunday morning, all locally transmitted, according to its Ministry of Health. The new cases brought the total confirmed cases in the country to 1,781 with 35 deaths.
2.Tet/Lunar holidays –
In the second week of Feb’21 Vietnamese and Chinese people mark the occasion of New year which is most commonly known as Tet or Lunar new year. This upcoming week-long holidays from 11th Feb results in softening market sentiments since buyers are in a holiday mood.
3.Hoaphat offering HRC at competitive prices-
Hoaphat steel the second-largest domestic integrated steel mill is offering HRC at a $660/t CIF basis. Towards the end of Dec’20, the company had raised HRC offers for domestic customers by $140/t and was offering re-rolling grade HRC at around $695/t CIF Ho Chi Minh for Feb. deliveries. Lower HRC offers from a domestic mill, in turn, weakens imported HRC offers from China.
4.Chinese export offers fall for three consecutive weeks-
With the current week decline in offers to $655/t CFR Vietnam as against $670/t CFR basis a week ago, offers have witnessed a fall for the third consecutive week from the high of $720/t CFR basis. However, a few major mills are maintaining their offer at a $710/t CFR basis.
Also, China’s Chamber of commerce for Metallurgical Enterprises has rolled-out a plea to the Beijing Government to reduce export rebates putting a leash on production volumes.
5.Absence of offers from other exporting nations-
Steel manufacturers from South Korea, Japan, and Russia are unlikely to offer HRC to Vietnamese importers due to better domestic realizations.
What may happen?
Imported HRC offers to Vietnam is expected to decline further next week due to the upcoming Tet holidays.
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