Imported HRC offers remained largely moderate this week due to the absence of active trades, mainly from China and India. Meanwhile, domestic mills are planning to export HRCs since end-users in Vietnam are less likely to make fresh bookings at the moment. Also, despite cheaper HRC offers from Russia, Vietnam mills have not made any recent booking for Sept-Oct’21 shipments.
Current offers from major exporting countries
- Offers from private Indian mills are hovering at $925-930/t CFR, a moderate decline from $930-940/t a week ago.
- State-owned SAIL is heard to have resumed HRC export offers to Vietnam for Aug-Sept’21 delivery. The company is offering HRC (SS 400) at around $900/t CFR Vietnam.
- Russian mills are still offering at $890/t CFR as the export tax of 15% shall come into effect from 1 Aug’21.
- Last week, China’s HRC export offers stood at $930-940/t CFR. However, no firm offers were heard today in the market.
Why buying has turned slow in Vietnam?
1. Slowdown in demand- Downstream industrial demand in the country continues to remain sluggish due to stringent lockdowns since the beginning of the month. “The sales in the domestic market have slowed down by around 20% since June,” SteelMint learned from a few reliable Vietnamese market sources. Also, the ongoing monsoon has dampened demand in Vietnam.
2. Lockdown due to Covid-19 delta variant- The steel hub of Vietnam, Ho Chi Minh City (HCMC), has been locked down since 9 July’21 over a spike in cases. The term of the lockdown has been further increased from the initial two-week period till 1 Aug’21.
Meanwhile, the country’s capital, Hanoi, is also witnessing some of the strictest social distancing regulations over infection concerns. The country has been seeing a spike in new Covid-19 cases of over 1,500 for the past couple of weeks.
3. Domestic mills reduce HRC offers over dull demand- Over the above-mentioned concerns, domestic manufacturer Hoa Phat has slashed HRC offerings by $50/t for Sep’21. Current offers stand at $920-925/t on CIF basis for Sept ’21 deliveries. The official announcement was made towards the end of the previous week. Furthermore, Hoa Phat is planning to export HRC in the upcoming weeks to offset the slow demand in the domestic market. Along with this, Formosa Ha Tinh also slashed its HRC export offers by $60/t m-o-m. Currently, the mill is offering HRC (skin passes) at $970/t CIF Vietnam, which were around $1,030/t CIF for Aug’21 shipments.
Will imported HRC offers increase in the near term?
The Chinese mills are expected to continue to keep their HRC export offers elevated amid the anticipated announcement of the export tax in early Aug. Also, the market is speculating an increase in the Russian HRC offers in the upcoming few weeks with an export tax of 15% coming into effect from 1 Aug’21.
Meanwhile, Indian steel mills continue to explore export opportunities due to higher price realizations over domestic sales.
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