Posted on 13 Jul 2022
Vietnamese producer Formosa Ha Tinh has slashed domestic prices for its September shipments amid a depressed market, Kallanish notes. However, trading participants do not expect that the $100/tonne price drop will propel buyers to return strongly to the market.
Formosa lowered its non-skin-passed SAE 1006 hot rolled coil prices to VND 15,210/kg or around $655/t cfr Ho Chi Minh City (HCMC). Like before, the mill’s SS400 grade HRC price is the same too. Domestic demand is very thin and the export market is no better, a company source says on the $100/t price reduction.
Vietnamese trading sources have not seen much pick-up from domestic buyers after the price cut. “Demand is bad. Chinese prices are more attractive,” a Hanoi trader says. Chinese SS400 3-12mm thickness HRC offers are at around $620-630/t cfr Vietnam.
The $620/t offers are from traders shorting the market, the trader adds. These sellers can make these offers for August shipment.
Formosa will not receive many bookings, a trader in HCMC says. Domestic demand is still very weak and global demand is also subdued, he adds. Inflation is hampering demand. “The market could drop some more,” the trader opines.
“I think buyers will buy small quantities [from Formosa] as per their requirements,” a regional trader adds. Imported quantities from certain sources such as India would be larger, at 20,000t, he observes.
A Chinese trader says Vietnamese buyers are counter-bidding at $580/t cfr for his offer at $620/t cfr for Chinese-origin SS400 grade HRC. There were small-tonnage orders of 1,000-2,000t for Chinese SS400 HRC at $640/t cfr early last week.
Most trading sources contacted by Kallanish say there are hardly any SAE 1006 HRC offers in Vietnam now. “There is no point to offer,” another Chinese trader says on the reason for the lack of SAE 1006 quotes. Another Chinese trader says offers would be at around $620/t fob or $650/t cfr Vietnam. He thinks there could be interested buyers for SAE 1006 HRC at $620/t cfr.
Source:Kallanish
