This week imported HRC offers remained stable after witnessing a steep hike in the past few weeks on the back of bullish sentiments in the global market.
The offers from major exporting nations are as below:
- Chinese mills are offering at $930-940/t CFR Vietnam
- Japanese mills are offering at $1,000/t CFR Vietnam
- Indian mills are offering around $940-950/t CFR Vietnam
Imported HRC offers remain largely stable due to:
1. Anticipated export rebate cut- Possible rebate cuts to 9% from the current 13% or excluding the entire rebate margin has prompted higher offers from Chinese mills. Chinese Govt. is planning to make this move to curb steel output, decrease exports and utilize the material domestically. Due to these measures, few mills have introduced a new clause of loss to be borne partially or fully by the buying party in case the rebate cut is enacted by the government. Thus, Vietnamese re-rollers are waiting for further clarity in HRC offers from China.
2. Increased reliance on domestic buying over imports- Last week Vietnam-based domestic steelmakers have raised their HRC prices for local markets which are mentioned below:
- Formosa Ha Tinh announced an increase of $140-145/t m-o-m in its HRC prices for June delivery. The revised offers for HRC (SAE 1006) skin pass at $910-912/t CIF basis and non-skin pass at around $905-907/t CIF basis.
- Hoa Phat has announced a sharp hike in the list price of HRC by $135/t m-o-m for June delivery. The revised offers for HRC (SAE 1006) stand at around $895-900/t CIF basis.
Thus, pipe makers and downstream buyers are preferring to procure HRC locally at lower prices as compared to imported HRC offers.
3. Vietnam steel production up by in Q1- According to Vietnam Steel Association (VSA), the country’s steel production stood at 2.96 mn t, up by 44% m-o-m and 40% y-o-y in Mar ’21. Meanwhile in the Jan-Mar quarter, the same stood at 7.66 mn t, up by 34%, SteelMint learned from market reports. Thus, the country is trying to ramp up its production and reduce its dependency on imports in the long term.
Near term outlook- According to the Vietnam steel association (VSA), The steel consumption of the country is expected to rise by 8% due to active infrastructure investment, the recovery in the real estate market, growth in the manufacturing industry, and the support of increased foreign investment. Thus, the demand for HRC is expected to remain optimistic in the near term.
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