Posted on 16 Mar 2022
Market sentiment for Chinese hot rolled coil has softened this week, Kallanish notes. As Vietnam's Formosa Ha Tinh is due to release its new domestic HRC prices anytime this week, Vietnamese users have little buying interest for imports. The region continues to see regional slab exported at exceptionally high prices.
The Chinese steel market has cooled down on escalating Covid-19 lockdowns and slower domestic demand for steel. Chinese commercial quality 3-12mm thickness SS400 HRC prices slipped to as low as $840/tonne cfr Vietnam from $865-870/t cfr last Friday. This market segment has fallen in tandem with the domestic market in Tangshan, a Chinese trader says. The Tangshan market is volatile and “changing every day”, he adds.
A well-known Chinese trader is heard to have sold a 10,000-tonne position cargo of 4-12mm thickness A572 Grade 50 HRC for end May-shipment at $900-903/t cfr Vietnam on 14 March. The premium for this grade over SAE 1006 HRC from China is $25/t, a Vietnamese trader says. “Buyers are scared because the price in China can go down further on rising Covid cases,” he says. Also, there are fears that potential Chinese trading of Russian HRC could lead to the dumping of HRC into Southeast Asia.
Traders’ offers for re-rolling 2mm and up thickness SAE 1006 HRC from China for May/June shipments at $910/t cfr Vietnam are stable from last week. But some Vietnamese trading sources report they heard Chinese SAE 1006 HRC offered at as low as $895/t cfr Vietnam. Chinese mills are offering directly at a minimum of $885/t fob China, or around $920-925/t cfr Vietnam, a Chinese trader says.
An Indian trader sees the Chinese weakness as temporary and predicts that Chinese prices will probably rebound in around ten days. “Chinese price weakness, driven mainly by the futures market, is just going through a temporary correction,” a regional trader concurs. He believes that Formosa will price its HRC at $910-950/t cfr and Vietnamese buyers will then bid for Chinese HRC at $890-900/t cfr.
Meanwhile, the regional slab import market is quiet as it is lagging behind better-paying export markets elsewhere. An Indonesian mill sold blast furnace slab at $1,050/t cfr Italy last Friday. "It's really unbelievable," a Taipei trader says. The Indonesian mill exported a large tonnage to the EU at $900-960/t cfr earlier this month, a Jakarta trader says. "Slab is in deficit," he notes.
Source:Kallanish
