The Vietnamese market for imported hot rolled coils (HRC) remained quiet as buyers are relying on domestic procurements. Meanwhile, the options remain limited with only a couple of countries actively offering HRCs for exports in the region.
Current offers:
1. Chinese mills are offering HRCs (SS400) at around $820/tonne (t) CFR Vietnam.
2. HRC price indications for Indian mills are at around $855-860/t CFR. However, an offer for position cargo from a trader was heard at around $830/t CFR.
3. No offers were heard from Russia, South Korea and Japan this week.
“No buyer is going to procure material at these levels,” said a trader.
Demand for imported HRCs in the Vietnamese market is still lagging due to the continual downtrend in global HRC prices.
Meanwhile, market participants are cautious of booking HRCs for imports, especially from China, because of the lingering concerns over an expected export tax announcement and the contract clause stating ‘buyers to shoulder the losses’ arising out of such an announcement.
Furthermore, higher realizations for Indian mills in the domestic market are still keeping them from reducing offers for overseas markets significantly. The SteelMint benchmark HRC (IS2062, 2.5-8mm) price was assessed around $70,500-71,000/t ($948-955/t) exy-Mumbai basis, as on 17 Nov’21. Thus, only a few mills are testing the market with offers while others stand observant of the current global price momentum.
On the demand front, although Vietnam has come out of the lockdown period a month back, there is limited thirst for HRCs which is likely being quenched by domestic mills. In mid-Nov’21, the two leading HRC manufacturers, Formosa Ha Tinh and Hoa Phat, have readily cut their HRC (SAE 1006, skin pass) prices for Jan’22 dispatches and are offering at $885/t CIF, and $835/t CIF Ho Chi Minh basis respectively.
Near term outlook
It is likely that demand will improve gradually, which will be addressed by domestic mills in the near term.
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