Posted on 26 Oct 2022
The Vietnamese hot rolled coil market remains under pressure amid ever-lower prices for Chinese material, Kallanish notes.
Bids are currently being invited for 3-12mm thickness Chinese SS400 HRC at $520/tonne cfr, Vietnamese market sources said on Tuesday. The lowest price heard for same grade and thickness HRC last Friday was $530/t cfr Vietnam.
Domestic demand in Vietnam is depressed mostly due to credit tightening measures designed to rein in the Vietnamese real estate sector, which are also hitting steel activity. “The downstream market doesn't have liquidity,” a Vietnamese mill manager says. Steel buyers are facing difficulties in getting Vietnamese banks to open letters of credit. The strengthening of the dollar against regional currencies is also affecting business, he adds.
A regional trader blames the sliding Vietnamese HRC market on traders who “keep shorting” despite the absence of buyers. Buyers continue to stay away because prices keep falling, creating “a vicious cycle”. He sees prices improving if such traders were to keep away from the market for at least a week.
In the Philippines, SS400 HRC offers are prevailing at $540/t cfr. “Prices are falling with other [steel] products,” a Manila trader says. The steel and commodity sectors have fallen since the conclusion of the Chinese Communist Party Congress, another regional trader notes. He expects steel prices to recover and stabilise this week.
Meanwhile, mills in Japan, South Korea and Taiwan have been actively offering HRC to markets in Europe and the Middle East at attractive and competitive prices. “The mills are selling quickly now, because they see prices falling in the future,” a trader in Vietnam says.
"The global economic outlook is not good, with the prospect of a possible recession next year, so mills are hungry and desperate for orders,” a Taipei trader says. But buyers are also very cautious in making any bids or taking action. He sees the market becoming “a dead market with dead prices”.
Source:Kallanish
