Posted on 03 Feb 2021
Market sentiment for hot rolled coil remains weak in Vietnam despite a producer’s decision to roll over its April-shipment prices, Kallanish notes.
Formosa Ha Tinh announced on 1 February that it will maintain its monthly prices at $720/tonne for its base SAE1006 HRC with skin pass. This was the price for its March shipments.
There is "…no reason to drop" prices, a source close to the company says. He adds that Chinese mills Baosteel and Benxi maintained their domestic prices, whereas Taiwan’s China Steel Corp increased prices. Formosa is eyeing exports rather than selling domestically, a regional trader says about its price decision.
Competing producer Hoa Phat lowered its HRC prices for March/April shipments to $660/t cfr on 27 January. Some market sources say the mill, which doesn’t differentiate prices for re-rolling and pipemaking grades, is mostly producing and selling SS400 grade HRC in Vietnam.
Trading activity in the Vietnamese HRC market is slow. Some attribute this to the approach of the Lunar New Year which commences next week. However, others have raised concerns that the Vietnamese market could weaken further. Position prompt-shipment cargoes for SAE 1006 HRC from China continue to prevail in Vietnam at $640-650/t cfr Vietnam.
Importers are trying to wiggle out of HRC contracts by not opening letters of credit with suppliers, Vietnamese trading sources say. Such companies are trying to cancel import contracts, even at $660/t cfr Vietnam signed last week, a local trader says. He believes the Vietnamese HRC market could be facing an oversupply situation because of large-volume import bookings due for arrival this and next month.
Source:Kallanish
