Triggered by a decline in Chinese offers and lower bids from Vietnam’s end users, imported HRC offers to Vietnam fell steeply by up to $40/t w-o-w.
Chinese domestic prices have started softening on weaker futures and slow buying, adversely affecting it’s HRC exports.
Imported HRC offers are falling due to following reasons:
- Falling Chinese offers-Major Chinese steel mills lowered their HRC offers to $670/t CFR Vietnam which were seen at $710-730/t CFR basis last week. Export offers have come down in light of softening Chinese domestic prices and scant seaborne buying. Few Vietnamese buyers are bidding at $650/t CFR Vietnam which is $20 lower than current offers, shared a major HRC importer in Vietnam.
- Chinese New Year looming ahead-Chinese mills may lower their offers further in order to ease out the inventories before festive holidays. Chinese New Year is beginning from 11th of Feb and weeklong holidays dampens the production activities.
- Limited options among end users in Vietnam-Russia, South Korea and Japan have cut back significant volumes for export to Vietnam on limited allocations. Rising domestic consumption in these countries has led to reduced interest for exports. Thus, Vietnam buyers are totally dependent on Chinese steel makers for HRC imports.
Outlook-China being the key supplier to the country is witnessing softening of prices which will lower HRC offers to Vietnam in the coming days. Also, it is expected that Vietnam importers may conclude few HRC deals at lower offers before the annual TET holidays scheduled in February.
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