Vietnam’s Imported HRC market has turned silent as most of the exporting countries happen to be showing limited interest in quoting offers this week. Furthermore, China is observing the Golden Week or National Day holidays (1-7 October 2022). However, Chinese mills were heard to have reduced their offers by $10-20/t ahead of the holidays, as per sources.
Offers to Vietnam
- Chinese HRC (SAE1006): Mills were heard offering $580-590/t CFR ahead of the Golden Week holidays, down $10-20 from the previous week’s $600/t CFR.
- Chinese HRC (SS400): Offers were floated at around $570-580/t CFR.
- Japanese HRC (SAE1006): Indications were heard at around $610/t CFR. Mills remained inconsistent in offering to the overseas markets.
- Indian HRC (SAE1006, boron-added): Offers were floated at around $620-630/t CFR. Levels have remained unchanged over the past few weeks. A revision in offers is expected around mid-October.
Vietnamese HRC market scenario:
1. Domestic procurement takes front seat: Buyers in Vietnam have kept their preference high for domestic products over imported material for the better part of 2022. Longer lead times, volatile global HRC export offers, and incosistencies in offers from exporting countries are among the key reasons for the shifting of focus to the domestic market.
“Vietnamese buyers continue to be enticed with the price levels announced by domestic HRC producers- Formosa Ha Tinh and Hoa Phat. Moreover, unclear direction regarding HRC offers on the global platform has kept buyers cautious about making import bookings,” a source informed.
2. Steel exports on decline: Steel export volumes have witnessed a continual drop for the past couple of months. Exports in June were at 0.786 mnt, which dropped to 0.504 mnt (down 35.85% m-o-m) in July, and further to 0.477 mnt (down 5.36%) in August. In August 2021, exports stood at around 0.837 mnt. A major setback for Veitnamese exporters was the inclusion of Veitnam’s value-added flat steel products in the EU’s country-specific quota in April.
Meanwhile, the decline in exports had an adverse impact on international sourcing. This led to three months of continual decline in the country’s steel imports. Import volumes showed steeper declines with each passing month since May 2022.
3. Limited options for imported HRC: A few exporting countries like Japan and Russia have remained inconsistent in offering HRC to Vietnam this year. This is another reason behind the improved preference for domestic produces. The two active countries have been India and China in 2022.
However, Indian mills were shackled by the announcement of 15% export duty on non-alloyed finished steel products towards end May. Furthermore, low acceptance for alloyed (boron-added) HRC weighed on buying interest for Indian HRC. Thus, there have been very limited choices for Vietnamese buyers this year. Also, in September, Indian mills shifted their interest towards the domestic market due to higher realisations and in anticipation of improved demand ahead of the Dussehra and Diwali festivals.
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