Vietnam’s imported HRC market reels under low buying interest

• Preference remains high for domestically produced HRC
• Buyers await price announcement for Aug-Sep 2022 sales
• Chinese offers decline by up to $10-20/t
• Few silent offers from Indian mills heard for Vietnam

Vietnamese hot rolled coil (HRC) market prices remained under pressure due to low buying interest and its impact on both domestic and imported products.

Domestic producer Formosa Ha Tinh was heard negotiating one-on-one with buyers while offering a $30-50/tonne (t) discount on case-to-case basis. On the other hand, Hoa Phat announced a second cut for July early-August 2022 sales with the revised offer standing at $775/t CIF Ho Chi Minh City (HCMC).

“The market demand remains slow at present. Domestic mills have either cut prices or are offering discounts for July-early-August sales to incite buying interest. Buyers are keeping their focus on domestic HRCs, and waiting for the price revision for August and early-September sales, due in the next 7-10 days,” informed a reliable source.

Imported HRC offers reel under bid-offer disparity:
Buyers continued to bid for imported HRCs at $730/t CFR Vietnam levels. High preference for domestic products, volatility in global HRC prices, and the gap between offers and bids weighed on the imported HRC offers this week as well.

Chinese HRC (SAE1006) offers were heard at $750-760/t CFR Vietnam, depending upon the tier that mills are categorized in. Last week, the offers stood at around $760-770/t CFR.

Meanwhile, the market has been abuzz with the news that some Indian mills are offering alloyed (boron-added) HRCs (SAE1006) in the market at $745-750/t CFR Vietnam. The market buzz is that Indian mills are now eyeing exports of boron-added steel since this category does not come under the purview of the export duty. Of course, SteelMint has not verified this claim, nor has it heard of any such export bookings yet.

Limited competition in market
South Korean and Japanese mills are not offering in the market mostly due to the low sales realisations compared with other importing countries. “No offers have been heard from the Japanese or South Korean mills for a long time now,” said a reliable Vietnamese trade market participant.

Near-term outlook
Vietnam’s imported HRC prices are likely to remain under pressure with Indian mills testing this market for acceptance. India mills are keen to reduce their inventory pressure building up amid the levy of export duty. Exports contribute to about 15-20% of the total sales volumes of Indian mills. This is likely to increase competition for Chinese mills as well as Vietnamese domestic mills in the near term.