The imported HRC offers to Vietnam remained unchanged this week due to holidays until 17 Feb. Resurgence of COVID infections just before the Tet holidays has also hindered the activities of HRC in Vietnam.
Offers remained stable due to the following reasons:
1. Lunar New Year holidays in China- Chinese Lunar New year holidays started from 11th till 17th Feb ’21. Thus, market participants are in a holiday mood and few have made an early exit from the market. Before holidays, offers for position cargoes from a few traders were heard around $680/t CFR Vietnam basis.
2. Japan and Korean mills kept HRC offers stable- Japanese and South Korean mills continued to keep offers stable at $760-770/t CFR basis. No change in offers were made since they are waiting for the Vietnam market to resume post-Tet holidays.
3. Tet holidays in Vietnam- Tet holidays scheduled in Vietnam from 10th Feb ’21 resulted in delayed purchases from importers since there is less time left to issue LCs. This has dampened buying sentiments in the market. This week since most of the mills remain on holidays so no active offers are heard in the market.
4. Anticipated cut in export rebate –The imported HRC offers from a tier II in China went up to $670-690/t CFR Vietnam and tier-1 mill is offering at $710/t CFR basis. Anticipated cut in export rebates has led to higher HRC export offers from major Chinese steel mills. However, this week offers remained mute due to holidays.
Will activities pick up post-holidays?
SteelMint foresees that trade activities are expected to increase post-Tet holidays. Market participants anticipate offers to increase on restocking demand after the gap of one week. Meanwhile, Chinese mills are also expected to reopen the market on higher offers after the holidays. Along with this, Indian mills may resume HRC export offers to Vietnam amid bearish trades in the domestic market.
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