Increasingly competitive Chinese HRC returns to Vietnam

Posted on 08 November 2021

The past week marked the return of Chinese hot rolled coil price competitiveness in Vietnam. Market sentiment dived after traders started offering cargoes for forward delivery at low prices.

A Chinese mill’s export sale for SS400 grade 2.3mm and up thickness HRC at $850/tonne cfr Ho Chi Minh City surprised Vietnamese market sources. The deal for 30,000 tonnes was to a Vietnamese trader/stockist, and was probably for January shipment, a Chinese trader reports. 

A Vietnamese trader was surprised that the Chinese mill accepted “such a low level” because it indicates that the mill dropped prices quickly. He also heard a fresh offer for Chinese-origin SAE 1006 HRC for January shipment at $865/t cfr Vietnam.

But another Vietnamese trader is sceptical that buyers will accept $850/t cfr. Buyers are holding back because of market chatter that domestic mill Hoa Phat will soon be releasing its new domestic allocations for January shipments at $850/t cfr. He hears that a Vietnamese re-roller ordered 5,000-10,000t of HRC, for shipment by mid-January, from a new Indonesian entrant at $810/t cfr. Traders are also offering SAE 1006 HRC from either China, India or Russia for April shipment at only $765/t cfr, he points out.

A pre-sale for 5,000-10,000t of 3-12mm thickness Chinese-origin SS400 HRC for February shipment concluded at $810/t cfr Vietnam on Friday, the first Chinese trader reports. But there is still no clarity on when a widely-rumoured forthcoming export tax on Chinese HRC will be implemented. A Vietnamese trader says he expects "friendly negotiations will take place if it happens during shipment".

For January shipments, importers are targeting to book SS400 grade HRC at $830-840/t cfr and SAE 1006 HRC at $850/t cfr, a Vietnamese mill manager says. Kallanish lowered its SAE 2-2.7mm thickness HRC assessment on Friday to $855-860/t cfr Ho Chi Minh City, down $17.5 on-week.

Meanwhile, hot-dip galvanised coil prices have also fallen in Southeast Asia. Offers for Z80 1mm base HDG from China are prevailing at $985/t cfr Manila, down from $1,020/t during the last week of October. “There are a few orders being booked here and there but mostly for thinner gauges,” a Manila trader said on Friday.

Source : Kallanish