Vietnam’s demand for imported HRC (SAE 1006) still remains low, as per recent assessments. However, a few Chinese mills were heard to have resumed quoting offers to Vietnamese buyers recently for HRC (SS400).
Current offers:
1. Tier II Chinese mills are offering HRC (SS400) at around $885-900/t CFR Vietnam.
2. A few Indian mills have withheld offers this week and waiting for clarity. Last week offers by Indian mills were in the range of $910-920/t on CFR basis.
3. There were no offers heard today from Russian mills. Last offers were at around $880/t on CFR basis.
4. No offers were heard from Japan or South Korea.
Factors impacting imported HRC offers
1. Offers by Indian mills remain on the higher side: The Indian mills have been consistently offering HRC at higher levels of around $910-920/t CFR lately.
Furthermore, the increase in mills’ list prices in Oct’21 along with the recent spurt in domestic restocking demand has boosted trade reference prices, which had hit an all-time high of INR 72,000-73,000/t ($961-974) for HRC in mid Oct after falling a little towards the month end.
2. Continuing uncertainty around Chinese export tax: Although Chinese mills are opening up with quotes in the global market the risks involved have kept demand low for products originating from China.
Notably, the confusion around announcement of an export tax by the Chinese government started in mid-May’21 and is still continuing. Also, the recent turmoil in the Chinese steel market, both spot and futures, has led to increased concerns among overseas buyers.
HRC futures contract prices on the SHFE for Jan’22 delivery fell sharply and closed at RMB 4,826/t today as against RMB 5,180/t a week ago.
3. Limited options, buyers resort to domestic sourcing: There have been few options for Vietnamese buyers in the past couple of months, with Japanese, South Korean and Chinese mills holding back from offering HRC for imports.
Russian and Indian mills were the only consistent sources for Vietnamese buyers during this period. Also, with the domestic producers slashing offers in the past couple of months, buyers are preferring domestically produced HRC to imports.
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