Imported HRC (SAE1006) offers to Vietnam from China dropped to almost 2-year lows at $555-560/t CFR this week. Buyers continued to remain less inclined towards imported HRCs despite a downward silde in global HRC prices in the recent past. Similar levels were last heard towards mid-November 2020. On a weekly comparison, the offers are identical.
A point to note is the offers at that time were on a rise since mid-May 2020, after COVID-19 had just started spreading after initial few cases were reported in December 2019.
Market scenario
1. Absence of firm offers from India: Offers for non-alloyed HRCs from India have been scarce since the levy of the 15% export duty towards end-May 2022. Since then Indian mills were offering boron-added (alloyed) HRC for exports which failed to attract interest from the buyers.
Furthermore, there have been no firm offers from Indian mills since 17 October amid the Diwali festive holidays. The Indian steel market had slowed down ahead of the festive date of 24 October and was muted for most of the previous week. Last heard indications from Indian mills stood around $600-610/t CFR Vietnam.
2. Inconsistenties in offers from other exporting countries: Other exporting countries such as Russia, South Korea and Japan remain inconsistent in quoting offers to the Vietnamese market.
Last heard indications from Japan were a couple of weeks back and at around $560/t CFR.
3. Domestic mills reducing prices to incite buying interest: Vietnam’s domestic mills have continued to reduce prices since May 2022, when the prices were announced for July and early-August sales. For instance, Formosa Ha Tinh’s HRC (SAE1006, skinpassed) got reduced to $593/t CIF HCMC for December and early-January 2023 sales contrasted against $855/t CIF for July and early-August 2022 sales.
Hoa Phat’s monthly HRC sales volumes too have been under pressure between April to July this year. However, the same had improved a bit in August and again dropped in September.
Near-term outlook:
Indian mills are expected to quote their offers for the overseas markets once list prices for November sales are announced in the upcoming few days.
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