Posted on 16 Dec 2021
A Vietnamese hot rolled coil producer’s domestic price cut underscores that the Southeast Asian HRC market is depressed. The mill’s latest price reduction for February/March shipments is around $55-60/tonne, Kallanish notes. When taking into account its price cut of $40/t last month, HRC prices have fallen sharply since November.
Traders in Vietnam says the mill informed its customers on 15 December that it will lower its non-skin-passed hot rolled SAE 1006 (hot rolled band) to VND 18,780/kg cif Ho Chi Minh City and skin-passed hot rolled SAE 1006 HRC to VND 18,890/kg. Using an exchange rate of VND 22.893/USD, this would be equivalent to $825/t cif for skin-passed re-rolling material to Ho Chi Minh City.
The mill is making its offers individually to customers, a Formosa mill source says. He tells Kallanish that he does not know the actual offer prices. The mill did not officially announce any values because it prefers to offer on a case-by-case basis depending on customer and booking volume, a regional trader says.
Prices are still higher than what Vietnamese buyers are willing to pay, traders say. Formosa could discount prices to around $800-810/t but it will not publicise this, says a trader in Ho Chi Minh City.
Formosa is hoping to achieve $805-810/t for SAE 1006, the regional trader says. This will be a good outcome for the mill considering that demand in Vietnam and China will be quite weak in January and February because of the Lunar New Year, he adds.
Formosa's HRC prices are still high, another Vietnamese trader says. He thinks coated steel mills will still buy from Formosa but for reduced allocations.
On the import front, offers have noticeably slumped below $800/t cfr. An Indian mill's recent offer for 2mm up thickness SAE 1006, heard at $790/t cfr Vietnam, did not attract takers. This is also the case for an offer for SS400 HRC from a tier 2 Chinese mill at $780/t cfr.
Source:Kallanish
