Vietnam: Buyers await HRC price revision announcement by domestic steel mills

The Vietnamese imported HRC market slowed down a bit this week as buyers opted to wait-and watch. Domestic steel majors Formosa Ha Tinh and Hoa Phat are expected to announce prices for May’22 deliveries in the next few days.

Moreover, a deal for Chinese-origin HRC was heard concluded at $905-910/t CFR Vietnam last week. However, no other details were available until the time of publishing the article. Sources highlighted that SAE1006 offers from bigger Chinese mills are at around $940/t CFR Vietnam.

Offers from Japanese mills remain elevated: Offers from Japanese mills have remained consistently on the higher side amidst robust demand from the domestic HRC-consuming sector. Moreover, offers were heard hovering in the range of $970-980/t CFR, similar to last week.

Indian mills put offers to Vietnam on hold: The Indian steel majors have put their HRC export offers to Vietnam on hold since the last week of Feb’22, the reason being higher realisations in the European market. HRC export deals concluded to Europe after Russia’s invasion of Ukraine have been ranging between $965-1,025/t CFR for April and May shipments. Meanwhile, offers were last heard at $1,250/t CFR for May shipments, which is unlikely to be accepted in the Vietnamese market at present, sources told SteelMint.

Vietnam’s domestic mills to announce steep price hike: Vietnamese steel mills are planning to increase their HRC prices for May shipment steeply amidst the ongoing spike in offers from other exporting nations and rising cost of raw materials.

For instance, Chinese HRC export offers have increased steeply to $945-955/t CFR as of mid-March compared with $855-875/t CFR in mid-Feb’22. The Russia-Ukraine geo-political tension increased the logistical disruptions and led to a spike in raw material prices, in turn pushing export offers higher across the globe.

Near-term outlook:
This week, both the active exporting countries, China and Japan, have maintained stable offers. It is anticipated that Chinese mills shall continue to enjoy cost advantage over Japanese mills. However, market participants are concerned about export allocations with rising concerns over increasing Covid cases in China.

SHFE HRC futures contract for May fell sharply today and closed at RMB 4,950/t as against RMB 5,137/t assessed towards the closing of last week, a drop of RMB 187/t ($30/t).