Posted on 17 May 2021
The price rally in Vietnam's hot rolled coil market continued during early last week, Kallanish notes. However, bullish market sentiment appears to have shifted after the deep downward corrections in Chinese steel futures.
Domestic producers released fresh offers for hot rolled coil during the past week. Hoa Phat’s July/August shipment price for SS400/SAE 1006 HRC was raised to $1,018/t cfr northern Vietnam and $1,022/t cfr southern Vietnam. These prices, released on 13 May, are up from $901-906/t cfr last month. Formosa’s SAE 1006 HRC for July shipments is priced at at $1,030/t cif Hai Phong and $1,035/t cif Ho Chi Minh City. Buyers are not keen to book imports after the Vietnamese mills offered new supply. “All buyers told me that they want to wait-and-see,” says a trader who offered Chinese SAE 1006 HRC at $1,030/t cfr on 13 May.
Many suppliers are keeping offer prices firm in Vietnam. Chinese mills are seeking to export at $1,060-1,100/t cfr. “Deals have taken place above Formosa’s levels,” a source close to the company says. Combined sales of around 400,000 t/m from the two producers are not enough to meet Vietnamese demand. Domestic demand is around 800,000t-1mt per month, the source says. But some traders say that demand could be reduced because of the pandemic.
Some Vietnamese traders heard that SAE 1006 HRC from India were booked at $1,070- $1,080/t cfr on 11 May, the same day as Formosa's price announcement. A Vietnamese trader says buyers would only pay non-Chinese origin material at this price level. This premium relates to hefty trade penalties imposed by the US and EU on Vietnamese flat exports using Chinese HRC substrate. Indian HRC is currently offered at $1,070/t cfr Vietnam.
But others said buyers negotiated with Indian HRC suppliers but no deals transpired. "The market is trending down," another trader says. A 10,000t stock lot of Chinese SAE 1006 HRC was sold earlier week at $1,040/t cfr Vietnam. There are also traders offering position cargoes at $1,030/t cfr. "No one will buy at these prices now because of fears that the market will fall further," the trader adds.
Kallanish raised the price for SAE 2-2.7mm thickness HRC on 14 May to $1,030-1,060/t cfr Ho Chi Minh City, up $47.5/t on-week.
Source:Kallanish
