The imported HRC market in Vietnam continued to move at a slower pace amid lacklustre demand in both the domestic and overseas markets since mid-October. Chinese HRC export offers in the market are hovering at the previous week’s levels, while there were no quotes heard from mills in India, South Korea and Japan this week.
Offers from major exporting nations:
- China: A few indications for HRC (SAE1006) are still being heard at $565/t CFR, unchanged as against the previous week levels.
- India: Indian mills continue to stay on the sidelines, observing the movement of offers in the market. The 15% export duty announced on 21 May 2022 was lifted from 19 November.
Factors impacting Vietnam’s HRC market:
1. Slow downstream industrial demand: The Vietnamese market showed a drop in the consumption of steel of late. Value-added steel product exports to Europe declined post the Russian invasion of Ukraine in February and gradually deteriorated with the increase in border tensions. High energy prices were also among the demand dampners in the EU recently. Also, rising concerns around recession in the global economies is slowing business in UAE and other markets.
2. Buying interest lags despite lower offers from domestic mills: Domestic mills even after announcing reduced prices earlier this month failed to incite buying interest. It bears recall, that earlier this month Formosa Ha Tinh (FHS) reduced HRC (SAE1006, skinpassed) prices for January and early-February 2023 sales by $38/t to $555/t CIF Ho Chi Minh City (HCMC). Hoa Phat also announced a cut of $57/t in its HRC (SAE1006, non-skinpassed) to $542/t CIF HCMC. Apart from the price reduction, Vietnamese mills were forced to cut down production volumes amid sluggish activities in the construction industry and lacklustre overseas demand.
3. Vietnamese mills turn aggressive on exports: The Vietnamese market, which had been among the leading buyers of HRC globally, has started scouting overseas markets for exports. A few export deals to Pakistan and Europe were heard over the past 7-10 days. A few market participants shared that Vietnamese HRC is being offered for export to India at around $545-555/t CFR levels.
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