Vietnam: Formosa increases HRC list price by $25 tracking gains in imported offers

• Formosa has increased the list price of HRC & wire rod by $20-25/t m-o-m
• Imported HRC offers for Vietnam have increased by $30/t on m-o-m basis

Vietnam’s domestic steel mill – Formosa Ha Tinh (FHS) has increased its HRC list prices sharply for Jan’21 delivery by $25/t, SteelMint learned from sources. Last month the company had cut offers by $15-20 for Dec deliveries.

Current offers of FHS

• HRC (SAE 1006, skin pass) is offered at around $560/t CIF basis. The last offer was at a $535-540/t CIF basis.
• HRC (non-skin pass) offer stand at $555/t CIF basis against the last offer of $530-535/t CIF basis.
• Wire rod offers of merchandise quality (MQ) 1 are at $555/t CIF and MQ2 stand at $545/t CIF

Reasons behind hike in offers:

1.Hike in imported HRC offers: Uptrend in imported HRC offers for Vietnam have been noticed in past couple of weeks. Prices have increased by around $30/t m-o-m to $555-560/t CFR. Chinese mills increased their HRC export offers on strong futures and higher domestic prices. A confirmed deal of 10,000-15,000 t HRC (SAE 1006) heard from a Chinese mill concluded last week at $550-555/t CFR Vietnam for end-Dec shipment.

2.Tighter supplies from India- Indian HRC offers to continue to remain less active in the Vietnam market since mills shifted their attention to domestic sales on better realizations. Thus importers have to procure material domestically or from China at higher prices. Limited alternatives have pushed domestic mills to raise price.

3.Increased reliance on domestic HRC – Vietnam’s second-largest domestic player, Hao Phat heard concluded few deals for Nov-Dec deliveries at prices varying between $510-525/t depending on the region and customers. Thus end-users in Vietnam are preferring to procure domestically over imports due to shorter delivery time. This can be another factor behind price hike.