Chinese mills have turned active for exports post RMB depreciation against USD.
According to market sources, Vietnam based HRC importers remained less active in booking cargoes last week anticipating further correction in offers from Chinese mills.
Imported HRC offers to Vietnam from China are likely to decline by USD 5-10/MT owing to devaluation of Chinese currency against dollar. Today RMB stood at 6.62 against USD compared to 6.55 a couple of weeks back.This lead to weakening futures.Thus bearish sentiments in China resulted in reduced HRC offers in export market.
Thus Chinese mills are offering HRC at USD 585-590/MT FoB basis.However imported offers of HRC to Vietnam from China is heard around USD 600-605/MT CFR basis. Last week major mills in China were offering imported HRC around USD 605-610/MT CFR basis.
Market participants mentioned that,”End users in Vietnam have adopted wait and watch mode and are waiting for further correction in HRC prices from China.”
Last week end users in Vietnam have concluded few deals of HRC with Indian steel mills at around USD 615/MT CFR basis.
Meanwhile end users are preferring HRC from domestic producer Formosa amid competitive prices and faster delivery.This reduces the dependency of Vietnam buyers on HRC imports from China.
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