- HRC offers drop from both China and India
- Suppliers waiting for firm bids from buyers
- Lower-prices domestic HRCs preferred over imported
Market demand for imported hot rolled coils (HRCs) in Vietnam remained subdued amid uncertain price directions and anticipation of further decline in offers by around $30/tonne w-o-w. Thus, buyers sustained procurement of domestic material, and which continues to weigh on the import prices.
“Factors that weigh on imported HRC demand have not changed much over the past few weeks. Inclusion of HDG in the EU country-wise quotas, logistical hindrances, downtrend in imported HRC offers, limited competition and higher preference for domestically produced HRCs continue to subdue the demand for imported ones,” observed a reliable Vietnam-based source.
Buying sentiments subdued
The sentiments in the Vietnamese market have not been that good since the beginning of the year. Leashes like logistical constraints, volatile export offers and improved domestic supplies have levelled the demand for imported ones. The inclusion of HDG, a value -added product, in the EU’s country-specific quotas, has dampened the buying interest further. Moreover, Formosa’s revision of its domestic HRC sales prices to $755-765/t CIF Ho Chi Minh City (HCMC) for August- early September deliveries has kept buyers’ interest glued to domestic procurement. The prices are down by about $95/t from those for July-early August sales.
Chinese HRC export offers drop by $30/t: Chinese steel mills were heard to have reduced their offers by $30-35/t to about $715/t CFR Vietnam from $745-750/t CFR Vietnam assessed a week ago. Volatility in Chinese futures and a drop in the domestic market demand amidst seasonal impact weighed on the export offers. In addition, mills are exploring the price levels befitting the buyers.
Indian mills’ offer indications drop: Indian mills are bearing the impact of the 15% export tax, which has effectively brought down the export volumes for non-alloyed HRCs. Trying to avoid the duty, steel makers have resorted to offering alloyed (boron-added) HRCs in the Vietnamese market. This week, price indications further dropped to $720-730/t CFR levels as against $740-750/t a week back. The bearishness in the market and a focus on domestic material have kept demand for Indian HRCs at bay.
“Yes, I heard $710-730/t CFR Vietnam levels as well, but it’s not an offer, rather a level mills might be willing to accept against a firm bid,” informed a reliable EXIM trade market participant.
Near-term outlook:
The various above factors may continue to weigh on the demand for imported HRCs in the near future. Also, the increasing difference between imported and domestic HRC prices might keep the latter under pressure in the near term.
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