The Vietnamese HRC market remained muted since 8 April 2022, on account of Hung Kings’ temple festival holidays, and will resume from 12 April 2022. However, a Chinese major was heard to have booked last week around 60,000 tonnes of HRCs (SAE1006) to Vietnam at $935-940/t CFR levels for May delivery.
There have been no fresh HRC import offers this week. However, those from the Japanese mills have been hovering around $980/t CFR Vietnam for the past couple of weeks, while indications from the Chinese mills have largely remained in the range of $925-940/t CFR levels, depending on mills.
Factors driving imported HRC market in Vietnam:
1. Hoa Phat continues to expand presence in domestic market: The integrated domestic steel maker, Hoa Phat, has been consistent in strengthening its presence in the Vietnamese steel market. It churned out 2.16 mnt of crude steel and achieved sales volume of 2.17 mnt in Q1CY22, as per the company’s press release. Out of the total sales volume, HRC sales aggregated to about 0.763 mnt in Q1.
Moreover, the company has been consistently increasing its sales base for HRCs in the market. For instance, HRC sales have been on a continuous upside, rising to 0.296 tonnes in March 2022 from the levels of 0.206 mnt in November 2021. Furthermore, the company posted record high sales of HRCs in a single month in March 2022, since it began selling HRCs commercially in November 2020.
2. Absence of competition in the market: The Vietnamese imported HRC market saw less competition since the beginning of CY22. The South Korean and Japanese mills have been inconsistent in quoting offers in the market amid better demand from their domestic markets. Indian and Russian mills remained active till mid-February, just before the geo-political tensions intensified between Russia and Ukraine.
Meanwhile, Japanese steel majors have been consistently quoting offers in the Vietnamese market for the past three consecutive weeks. However, the Chinese offers are still competitive against those of the former.
Indian mills were seen actively offering HRC to the European Union (EU) on higher price differential as the offers last week were heard to be around $1,250-1,300/t CFR EU for S275 grade HRC. Thus, Indian mills kept away from quoting offers for other markets like Vietnam and Turkey.
Buyers await price announcement from steel mills: In light of the current disruption in the global HRC trade platform, Vietnamese buyers are showing increased preference for domestic HRCs. Thus, the market for imported HRCs has turned slow. Buyers are concerned about the price direction for imported HRCs and are now looking forward to the domestic mills for announcing prices for June and early-July sales in the upcoming days.
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