News Room - Steel Industry

Posted on 21 Mar 2022

Vietnamese domestic HRC prices rise above Chinese imports

Another Vietnamese strip producer has sharply hiked its prices for new hot rolled coil allocations, Kallanish notes. Hoa Phat Dung Quat Steel announced a $85/tonne increase for its May/early-June shipments on Friday.

Hoa Phat’s new prices for SAE1006/SS400 grade HRC are at VND 20,850/kg ($910/t) to northern Vietnam, and VND 20,900/kg to central and southern Vietnam. The prices, which exclude VAT, are for non-skin passed strip and are equivalent to $910-912/t cif Vietnam, company sources say. But traders say the mill’s new prices are actually at around $905/t cif.

Vietnamese pipemakers, which form the majority of Hoa Phat’s buyers, would be able to afford the mill’s new prices, Vietnamese trading sources say. Early last week, Chinese 3-12mm thickness SS400 grade HRC from traders was booked at $840-845/t cfr and rose to $850-855/t cfr mid-week. But fresh offers are prevailing at $860-870/t cfr Vietnam.

Buyers would prefer to book from a local producer because local shipments would involve shorter lead times and provide more security for the buyer, a regional trader says. Buyers would also prefer new-production material compared to traders’ position cargoes, he adds. Chinese SS400 HRC prices are unlikely to remain at much lower than Hoa Phat’s. "Prices will keep going up," a Chinese trader says.

Hoa Phat’s HRC price hike was expected because the company shadows the pricing set by Formosa Ha Tinh Steel (FHS). The day before, FHS raised its non-skin passed SAE 1006 coil prices for June shipment by $90/t to $930-935/t cfr Vietnam. Hoa Phat’s prices are typically $10-30/t lower than FHS, depending on market conditions, market sources note.

There has been market acceptance for FHS' new domestic prices. “Based on the events happening in Europe, they can accept the price hike,” the regional trader says. Since local users are focused on domestic purchasing for re-rolling HRC, import sales have been slow. Low-priced Chinese re-rolling SAE 1006 HRC offers are drying up. It is not easy to get offers now, a Chinese trader said on Friday. Such offers for 2-2.5mm thickness SAE 1006 HRC for May shipment are tagged at $905-910/t cfr Vietnam, he added.

Kallanish maintained SAE 2-2.7mm thickness HRC at $910/t cfr Vietnam.

Source:Mysteel Global