Posted on 25 Apr 2022
Chinese hot rolled coil offers have fallen further in Vietnam, Kallanish notes. Chinese steel exports are now cheaper because of the recent RMB currency depreciation.
Chinese 2-2.5mm thickness SAE 1006 HRC offers are now prevailing at $890-895/tonne cfr Vietnam, down from $910-915/t cfr during the 15 April week. For 3-12mm thickness SS400 HRC from China, offers are $15/t lower at $840-845/t cfr. Chinese suppliers are eager to export. A Chinese trader notes that there are many offers in Vietnam.
The drop in SS400 grade coil has spurred buying. “Some pipe customers are buying at these low prices,” a Vietnamese trader says on Friday. But he has not heard of any recent deals for Chinese SAE 1006 HRC. A large tonnage of 2mm thickness SAE 1006 grade HRC for June shipment from a tier 1 Chinese mill closed at $905/t cfr on 15 April.
Leading strip producer, Formosa Ha Tinh, hiked the price for non-skin-passed SAE 1006 for June shipment to $950/t cif Haiphong and $955/t cif Ho Chi Minh City on 15 April. Most industry sources in Vietnam think that the mill will not be able to fully sell-out all its allocations at these price levels. The Vietnamese trader thinks that the excess allocations left will be offered in the next round in May. Another Vietnamese trader thinks that the mill will resort to giving discounts to its bigger customers.
But a regional trader thinks that the mill will have sufficient Vietnam reroller customers willing to pay the $40/t or so premium over Chinese imports to ensure supply security. “Freight rates are uncertain and Formosa has a domestic short lead time,” he says. He himself has been notified two-three weeks ago of potential delays lasting 1-2 months for May shipments of Chinese coated products. This is due to extensive Covid lockdowns in China. Moreover, there are Vietnamese export orders to destinations which cannot accept coated steel using Chinese HRC substrate, he notes.
Kallanish assessed SAE 2-2.7mm thickness HRC at $890/t cfr Vietnam, down $20/t on-week.
Source:Kallanish
