The Vietnamese integrated steel major, Formosa Ha Tinh, has rolled over its hot-rolled coil (HRC) prices for Dec’21 deliveries, SteelMint learnt from reliable market sources. The effective offers for skin pass HRC continues to hover at $930-935/tonne (t) CIF Vietnam basis. However, the producer has lifted the rebates of $5-10/t that was provided on November shipments, informed local trader sources.
Meanwhile, market sentiments are bullish since exporters expect demand in Vietnam to rise in the upcoming weeks.
What has driven the mill to roll over prices?
1. Increase in offers from exporting nations: India and Russia have remained consistent in offering HRCs for exports to Vietnam recently. Although the Russian made significant bookings at lower price levels of $850/t CFR basis in Sep’21, they increased the offers recently to $870-880/t CFR Vietnam levels.
Meanwhile, Indian mills had been consistently offering HRCs to Vietnam at around $890/t CFR basis in Sept’21 and increased the same recently to about $920/t CFR last week. Few trade sources highlighted that the Indian mills are likely to announce revised HRC export offers shortly.
“The bids from Vietnamese importers have also increased to $865-870/t CFR with a few bids heard even higher at around $900/t CFR,” said a Vietnamese trade channel partner.
2. Coal supplies impacting HRC export offers: The disruption in thermal and coking coal supplies at the global scale and a surge in prices therein forced mills across geographies to increase steel prices recently. This roll-over in price factors in this concern too.
3. Limited options in imported HRC: Inconsistency in HRC export offers from China, South Korea and Japan have kept the options limited for Vietnamese importers in the past few months. Ongoing stringent production curbs in China and an economic recovery-induced increase in demand in Japan and South Korea kept exports allocation low from these countries.
4. Vietnamese market opens after an extended lockdown: The Vietnamese market has recently come out of the phased lockdowns extending from Mar’21 to end-Sep’21. Thus, the mill may have considered this option to lend possible support in the revival of economic activities.
“We expect demand to start rising from this month. However, the prices have increased with the global economies facing a crisis scenario over higher coal prices and limited supplies,” said a Vietnam-based source.
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