Sentiments in Vietnam’s imported HRC market continued to weaken on the news of bookings of lower priced Russian HRCs. Vietnamese importers were reported to have booked two vessels of HRCs of a total volume 60,000 t from Russia last week at discounted prices. The deal was concluded at $905-910/t CFR Vietnams for mid-Nov’21 shipments. However, the quantity involves position cargoes from traders, SteelMint learned from credible sources.
On the other hand, imported HRC offers from most of the countries stayed unchanged over the week, while a few have not quoted offers for the week.
Offers for the current week
- Indian mills continue offering at $925-930/t CFR.
- Chinese mills are not quoting for the second week in a row.
- South Korean and Japanese mills stand muted on quoting offers.
Vietnam market is dull and quiet due to following reasons:
1.Surging Covid-19 cases: The recent surge in cases has taken a big toll on market activities. Vietnam’s Ministry of Health reported 5,155 new cases of Covid-19 today (9 Aug’21) morning, with the steel-hub of Ho Chi Minh remaining the epicentre and under strict containment norms. Furthermore, China and India both are showing an increase in Delta variant cases since the beginning of Aug’21.
2.Impending announcement of China’s export tax: The market is a buzz with news that an export tax of about 10-15% is likely to be announced by 15 Aug’21. This has further added to the buyers’ concerns. Also, this has been one of the reasons for the shift away from Chinese-origin HRCs to cheaper alternatives.
3. Indian mills exploring new avenues for exports: Since Vietnam is under lockdown, Indian mills are exploring new destinations for exports to South Korea, Turkey, and the UAE due to better price realizations.
4.Domestic mills exporting HRCs despite imports: Vietnam mills are turning active in the HRC exports market. A Covid surge in South East Asia has changed the scenario within a short period. SteelMint heard that a major integrated steel manufacturer in Vietnam has reportedly booked 20,000 tonnes (t) of hot rolled coils (HRCs) for exports to Europe. The deal was concluded at around $970/t FoB Vietnam for Sept’21 shipment. The company also exported HRCs to the US at around $1,100/t CFR, but the deal could not be confirmed till the time of publishing this report.
Outlook- Vietnam’s HRC market will remain dull due to increased Covid cases and frequent lockdowns. Hoa Phat, the Vietnamese steel major, has reported that the sales volumes for HRCs got slashed by 30% to 160,000 t in July over 230,000 t sold in June’21 signifying weaker end-user demand. Also, Indian and Chinese mills are less likely to offer since Vietnam importers are inclined to Russian low-priced HRC offers.
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