Key highlights:
- Indian mills actively resumed offering HRC to Vietnam
- Chinese mills have further raised export offers on possible rebate cuts
- Hoa phat released new price list for May shipments
Indian mills have raised HRC export offers sharply by $15-25/t to Vietnam following the trend of higher export offers from China. Also, mills are highly interested to export HRC to overseas nations at higher offers. Current offers for HRC (SAE 1006) stand at $740-750/t CFR Vietnam for April shipments.
Confirmed deal – Last week a major private steel mill has concluded an HRC deal of about 30,000 t at $725/t CFR basis for end March shipments, SteelMint learned from its authentic trade channels.
Chinese mills continue to increase HRC export offers to Vietnam-
Imported HRC offers to Vietnam witnessed a steep hike by $40 w-o-w after the gradual return of market participants post-Tet/Lunar New Year holidays. Strong Chinese futures and possible rebate cuts to curb excess steel output resulted in a significant hike in Chinese offers.
Tier-1 mills were offering around $750-760/t CFR basis. Last week the offers were at $710-720/t CFR basis.
Tier-2 mills were offering at $740/t CFR against $690-710/t CFR basis last week.
Key factors driving imported HRC prices are:
1. Export rebate cuts in China-
Possible rebate cuts to 9% from the current 13%, or excluding the entire rebate margin has prompted higher offers from Chinese mills. Chinese Govt. is planning to make this move to curb steel output, decrease exports and utilize the material domestically. Due to these measures, few mills have introduced a new clause of loss to be borne partially or fully by the buying party in case the rebate cut is enacted by the government.
2. Rebound in restocking demand-
HRC importers returned to the market after a gap of one week post-Tet holidays. Trade activity picked up and the rebound in restocking demand resulted in a steep hike in offers from China and India. As per Vietnam iron and steel data compiled by SteelMint in Feb’20, imports stood at 1.02 mn t which touched to 1.33 mn t in Mar’20. A similar market trend is expected in CY’21.
3.Higher offers from domestic mills-
Vietnam’s second-largest domestic steel mill, Hoa Phat has sharply raised its HRC (SAE1006/SS400) offers by $30-35/t CIF and offering in the range of $685-690/t CIF Vietnam for April -early May shipments. Last month the offers stood at $650-660/t CIF basis. Meanwhile, another domestic integrated steel mill is likely to revise its HRC prices shortly. Thus “Vietnam buyers were pushed to follow the fast-rising prices as official list prices of domestic mills were much higher”, shared credible sources to SteelMint,
What may happen-
Indian steel mills are less likely to conclude export deals at lower bids, considering healthy export bookings have been concluded since mid-Feb’21. Also, the buzz on export rebate cuts will continue to support higher prices from Chinese steel prices. Thus, SteelMint anticipates that imported HRC offers to Vietnam will remain strong in the near term.
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