Imported HRC offers to Vietnam rise tracking global uptick

• Import offers for Chinese HRCs rise by $10/t w-o-w
• Indian mills to roll out offers in next few days
• Domestic mills raise prices for February and early March 2023 sales

Chinese mills increased their hot rolled coil (HRC) offers by $10/tonne (t) this week, marking it the third consecutive week of increase. Domestic Vietnamese steel majors Formosa Ha Tinh and Hoa Phat announced an increase in their February and early-March 2023 sales prices last week.

Current week’s imported HRC offers to Vietnam:

• China: Chinese mills offered HRCs (SAE1006) at $615-620/t CFR Vietnam, up from the previous week’s $605-610/t CFR. Offers for HRCs (SS400) were heard at around $605-610/t CFR.
• India: Latest offers from Indian mills, heard early last week, were around $580/t CFR. It is being anticipated that mills will come up with fresh offers in the next few days.
• Japan: Offers from Japan were heard at around $650/t CFR.
• No offers were heard from Russia or South Korea.

What factors are influencing imported HRC prices?

1. Rise in global HRC prices: Imported HRC offers to Vietnam are moving higher on the back of rising global HRC prices, sources hinted. In the past couple of weeks, Chinese HRC (SS400) export offers have increased steeply by $45/t to $590/t FOB Rizhao, as assessed on 13 December 2022. Also, in the SHFE futures market, Chinese HRCs (May 2023 contract) showed an increase of RMB 84/t ($12/t), settling at RMB 4,131 ($592/t) on 16 December compared with that on 12 December. (1 CNY = 0.143399 USD ; 1 USD = 6.97356 CNY)

2. Price hike by domestic mills: The domestic steel majors in Vietnam announced an increase in their sales prices a week back. Weak consumption in the market over the past few months had led to pent-up demand, which is likely to unleash in the near term, sources claimed. Moreover, recent increase in HRC prices on the global platform and rising input costs have pushed mills to raise their prices.

Subsequent to the price announcement, Formosa’s HRC (SAE1006, skinpassed) price stood at $610/t CIF Ho Chi Minh City (HCMC), up by $55/t against the previous month’s announcement. On a similar note, Hoa Phat also raised its HRC (SAE1006, non-skinpassed) price by $53/t to $595/t CIF HCMC.

Furthermore, the demand-supply dynamics remain impacted as Hoa Phat had shut down four blast furnaces in the month of November. Also, Formosa reduced its crude steel output by 15%, as reported by the local media.