- Lucrative domestic prices weigh on demand for imported HRC
- Limited competition in the market
Vietnam’s lucrative domestic hot rolled coil (HRC) prices continue to weigh on the demand for imported ones though some countries are offering at competitive levels. Thus, imported HRC offers from most of the offering countries have come down this week.
Imported HRC offers from major countries:
- China HRC (SAE1006): $690-710/t CFR, depending upon mills. Last week indications were around $705-715/t CFR.
- China HRC (SS400): $680-685/t CFR
- However, with an increase in HRC futures a few mills were heard to have temporarily suspended export offers.
- India HRC (SAE1006, boron-added): $690-710/t CFR. Last week’s indicative offers were at $710-730/t CFR.
- A deal for Indian-origin HRCs (boron-added) was heard concluded at $710-715/t CFR HCMC early last week. However, this could not be confirmed till the time of publishing the report.
- Russia HRC (SAE1006): $640/t CFR as against $680/t CFR a week back.
How is the market scenario in Vietnam at present?
1. Domestic mills announce second round of price cuts:
Formosa Ha Tinh and Hoa Phat have announced significant reductions in HRC prices for the second time this month for August and early-September sales.
- Formosa Ha Tinh is currently offering HRC (SAE1006, skinpassed) at $720/t CIF Ho Chi Minh City (HCMC), against $885/t CIF for July and early-August sales.
- Hoa Phat’s offer for HRC (SAE1006, non-skinpassed) stands at around $700/t CIF HCMC, contrasted against $775/t for July and early-August sales.
2. Preference high for domestic HRCs
Demand for HRCs has been slow in the Veitnamese market lately. With the European Commission bringing Vietnamese-origin hot-dipped galvanised (HDG) into country-specific quotas, demand has been dented further. “Whatever demand at present is there in the market is being catered to by the domestic mills and buyers are avoiding booking imported HRCs amidst various concerns. Longer delivery lead times, and competitive domestic pricing remain prime reasons,” said a reliable source from Vietnam.
3. Few exporting countries active
The choices amongst imported HRCs have remained limited since the beginning of the year. China, Russia and India are seen active in the market at present. However, offers from South Korean and Japanese mills have been absent since January 2022. Also, amongst the three active countries, Russia has resumed offering HRCs recently and has been aggressively quoting competitive prices compared to those of the domestic producers. Nonetheless, buying interest has remained thin.
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