Indian steel mills resume HRC export offers to Vietnam

Major Indian steel mills have resumed HRC export offers to Vietnam after a pause due to a lockdown announced in Vietnam amid rising Covid cases. However, local participants mentioned no confirmed trade as buyers have adopted a ‘wait-and-watch’ approach and are waiting for domestic mills to announce their offers.
 
 Offers for this week:

• Few Indian mills are offering HRC at around $1,025-1,050/t CFR basis for July-end and Aug shipments. However, offers for position cargoes are around $975-990/t CFR basis.
• Meanwhile, Chinese steel mills (like Rizhao, Shagang) are offering HRCs at around $985-990/t CFR basis, which is higher by $960/t CFR
• HRC price indications from Japanese mills are heard at $1,100-1,150/t CFR.

Thus, Vietnam buyers are preferring domestic HRCs due to the following reasons:

1.Formosa Ha Tinh to announce offers shortly: Due to much chaos in imported HRC offers from major exporting nations, Vietnam re rollers are preferring domestic HRCs. “Buyers are waiting for Formosa offers. They will release the prices soon,” said a source. Also, domestic offers are cost-effective as compared to imported offers.

2. Chinese govt may announce export duty: There have been rumours in the market that China may announce an export duty on flats soon, another factor that has kept buyers away from booking materials. Thus, the nation’s HRC export offers to Vietnam continue to remain volatile.

3. Rerollers reducing dependency on imports: Vietnam’s Hoa Phat steel sales reached 695,000 mt in May this year, including 324,000 mt of construction steel and 225,000t of hot rolled coils. In the given month, Hoa Phat restricted the export supply of billets to divert supply to its domestic market, SteelMint learned from market reports.

Near-term outlook-Vietnam rerollers will increase their preference for domestic HRCs due to continued uncertainty on export tariff adjustment to be announced by the Chinese government. Also, Indian-origin cargoes are at higher prices, and due to the disparity between bids and offers no major deals have been concluded yet.