Vietnamese HRC market in free-fall

Posted on 05 November 2018
 

Source: Kallanish

Vietnam’s HRC import market continues to weaken, Kallanish notes. There was little sign that the market will reach bottom soon, trading sources say.

Last Thursday, an offer for small coil from a Ukrainian mill for January shipment was heard at $518/tonne cfr, a level which was alarmingly low considering that small coil from a Russian mill was ordered the week before on 23 October at $533/tonne cfr Vietnam.

A leading reroller last week also ordered 20,000-30,000t of 2.3mm and up thickness pipe-making grade SAE 1006 HRC, open origin, for January shipment at $535/t cfr. “The supplying mills are not fixed yet,” a Vietnamese trader says. He says that the international trader who sold the cargo is short-selling because of bearish expectations. Another says that this cargo has fully sold out.

Leading Chinese mills were giving offers for rerolling grade SAE 1006 2-2.5mm thickness HRC at $550-555/t cfr but no deals have struck. Importers are bidding lower. They are bidding at around $545/t cfr against a January-shipment offer of $550/t cfr from a leading Chinese mill, a Vietnamese trader says. Bids for material from lower tier mills are at $540/t cfr.

Buyers are bidding SAE 1006 for pipemaking at $535/t cfr and SS400 grade HRC at $530/t cfr, a Chinese trader says. He was pessimistic of the market outlook and believes that prices could reach $500/t cfr in the first quarter.

A combination of factors including low-priced material from the CIS, reduced export markets for Vietnamese cold rollled, coated steel and pipe products amid trade disputes which have resulted in domestic oversupply have constributed to the negative market sentiment. 

Last Friday, Kallanish reduced its SAE 1006 grade 2-2.7mm thick HRC price assessment into Vietnam to $540-545/t cfr, down $11/t on-week, and down $30/t since the first week of October.  



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