Posted on 10 Nov 2021
The Vietnamese hot rolled coil import market is exceptionally weak. Its downturn is attributed to the softening in raw materials prices and the return of Chinese exporters because of the weak Chinese domestic market, Kallanish notes.
Traders hope steadier raw materials may support HRC. “The drama for iron ore and coal is now gone,” a regional trader says. “Mills are still making good money especially after the iron ore market adjusted downwards.” Mills made massive profits before; now they are making lesser profits and they cannot be greedy, he adds.
HRC prices have fallen by a steep $50-60/tonne, another regional trader says. Buyers are weary about the market now and want to wait for freight costs to come off. These cautious buyers will only return to place orders in January unless they have low inventory. “China is entering its low season too,” he adds. He hears certain Indian SAE 1006 HRC offers are prevailing at $820-830/t cfr Vietnam.
A tier 1 Japanese mill’s current offer for SAE 1006 2mm HRC at $890/t cfr Vietnam for January shipment is surprisingly low. “But this is for its regular buyers,” a Chinese trader says. Another Japanese mill is supplying SAE 1006 HRC to a Malaysian re-roller at $950-1,000/t cfr, a Singapore trader reports.
Traders' pre-selling of HRC at lower prices is escalating the market downturn. They are offering SS400 HRC for January shipment at $810-820/t cfr Vietnam, Vietnamese trading sources say. January shipments of 3mm base SAE1006 are offered at $850-860/t cfr, a Vietnamese trader says. They are also offering HRC at $765/t cfr for April shipment. These offers are for open origins.
A Chinese trader is offering January/early February shipment cargoes at $815/t cfr Vietnam for SS400 grade HRC and at $850/t cfr for SAE 1006 HRC. The trader can offer at least $10/t lower for end-February/early March shipment because it expects prices will continually decrease, an informed source says.
"The market is dead. Mills and traders are reducing price to get orders. But buyers prefer to wait and see because the downtrend is clear," a Vietnamese trader says, "Many buyers who purchased HRC from an Indian mill last month will make big losses," another Vietnamese trader opines. The 40,000-tonne SS400 HRC cargo for November shipment was booked at $910-920/t cfr.
Source:Kallanish
