Imported HRC offers to Vietnam witnessed an increase from Russian mills this week as the country sees the easing of Covid concerns and a gradual reopening of the market. Also, with limited options to select from, the Vietnamese market is seeing offers from Indian mills maintained at higher levels.
Current week’s offers:
1. Russian mills quote at around $880/t CFR, up from the previous week’s $870-880/t CFR levels.
2. Most of the Indian mills maintained levels of $890-910/t CFR, with a few offers being heard higher at around $920-930/t CFR as well.
3. No offers were heard from mills in China, Japan and South Korea.
What is impacting the Vietnamese market?
1. Limited options to select from: With most of the exporting countries refraining to offer in overseas trade, it has become a market of limited options for Vietnamese importers. Only two countries, namely Russia and India, are offering in the region for the past couple of months. Where Chinese mills have limited export allocations due to ongoing production curbs, the Japanese and South Korean mills are catering to the domestic demand with their economies on a gradual recovery track.
2. Slower recovery of market activities: The market in Vietnam is opening up slowly as Covid related concerns ease off. “The labourers have started coming back to the HCMC as the market has started to gradually reopen. The demand for steel is likely to increase further but will depend on the speed of recovery,” shared a Vietnamese market source.
3. Domestic finished steel production volumes increase in Sept’21: The reliance on domestic products increased recently due to hindrances in overseas trades amid Covid-led logistical barriers. This led to an increase in domestic finished steel output. The volumes stood around 2.40 mn t in Sept’21, up by 2% as against 2.35 mn t a month ago, as per data released by Vietnam Steel Association (VSA).
The production volumes stood at around 2.92 mn t in May’21 and ended up at 2.35 mn t in Aug ’21 as the stringent lockdowns during the period restrained both production and trade.
Outlook:
The domestic mills have rolled out their price policy for Dec’21 shipments, with Formosa continuing to offer HRC (skin pass) at $930-935/t CIF levels while Hoa Phat reduced prices by $8/t m-o-m to $892/t CIF basis. Thus, it would be interesting to see what will the Vietnamese buyers prefer as the imported HRC offers are still at some discount.
Data from the National Bureau of Statistics (NBS) shows China’s crude steel output stood at 73.75 mn t in Sep’21, a year-on-year decrease of 21.2%. The average daily crude steel output in Sep was 2.45 mn t, a decrease of 8.5% on the month. China’s crude steel production was recorded at 805.89 mn t in Jan-Sep’21 – up 2%, y-o-y.
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