Posted on 01 Sep 2025
Detained hot rolled strip cargoes in China amid a crackdown on VAT tax evasion are affecting the Vietnamese hot rolled coil market, Kallanish notes. Vietnamese buyers who had booked these cargoes for August/September shipments face shipment delays. However, other HRC suppliers have welcomed the move to block the notably cheaper cargoes.
Some traders are advising buyers to place new HRC orders for end-October shipment because it is uncertain whether the detained cargoes will be shipped. The traders are offering wide-width Q195/Q235 grade HRC at $490-495/tonne cfr Vietnam and wide-width SAE1006 HRC at $497-500/t, “based on how much they want to sell and in tandem with steel futures”, one trader says.
“Some customers have transferred their contracts to the larger mills such as Benxi and Angang because cargo arrival is certain,” he adds. The detained HRC cargoes are mostly wide-width 1,900/2,000mm SAE 1006/Q195 grades with a smaller quantity of Q235 grade.
Small buyers are the ones being asked to place new orders, another trader notes. Based on the earlier bookings’ prices of $450/t, a 2% non-delivery penalty would amount to $9/t for the traders. "It would be cheaper for the traders to just pay the penalty," he explains. "For big buyers, traders are trying to solve the issue.”
He knows of several August-shipment orders which have been delayed for at least 15 days. "They are awaiting the invoice from the Guangxi mill producer to do customs clearance," he says.
A booking for Chinese 1,900mm SAE 1006 HRC was heard transacted at $497/t cfr Vietnam last week, while offers are prevailing at $498/t cfr, down from $502-503/t cfr the previous week. “The futures market has slowed down,” the first trader says.
A trader sold 30,000 tonnes of Indonesia's Dexin 3mm base thickness HRC for November shipment at $500/t cfr during the week through 22 August. Offers for Indonesian HRC are prevailing at $503-505/t cfr, while buyers are targeting under $500/t cfr. “It’s good news for us actually,” a Jakarta-based trader says on the VAT crackdown. “We totally cannot compete with non-VAT cargoes.” Japanese 2mm-based SAE 1006 HRC is offered now at $514/t cfr, a Vietnamese reroller observes.
Kallanish assessed SAE grade 2-2.7mm thickness HRC at $500-505/t cfr Vietnam, unchanged week-on-week.
China Customs have detained some 200,000t of HRC and sheet, mostly destined for Vietnam, at Fangchenggang Port, Guangxi, on suspicion of VAT-evasion (see Kallanish passim).
Source:Kallanish
