Vietnamese HRC market slips on trader pre-selling

Posted on 22 November 2021

Vietnamese hot rolled coil market sentiment is weak as traders continue to pre-sell cargoes, Kallanish notes. A local producer’s heavy price cut during last week underscored market weakness.

Chinese traders started offering 2-2.5mm thickness SAE 1006 HRC for January shipment from a leading Chinese steel mill at $835/tonne cfr Vietnam on Thursday. The offer comprises 50% of 2mm base thickness, with the remainder being 2-2.5mm thick strip. The traders involved are short-selling the material and the Chinese mill has denied making the offer, Chinese trading sources say.

The offer has not attracted firm bids yet, a Chinese trader says. But he thinks that buyers could eventually bid at $800-810/t cfr. Indian SAE 1006 HRC is currently offered at $830/t cfr Vietnam, a Vietnamese trader says. “The market is dead. There are no bids at all,” he opines. A Chinese trader reports hearing that a leading Indian mill was offering SAE 1006 HRC for December/January shipment at $850/t cfr Vietnam earlier in the week.

Hoa Phat Dung Quat Steel announced on 16 November that it will reduce domestic HRC prices by the equivalent of $55/t from last month. Its new prices for Grade SAE1006/SS400 HRC for January shipments are at around $835-840/t cif Ho Chi Minh City.

Traders were making offers for SS400 grade HRC mainly from Chinese mills for shipment in the first half of February at $775-780/t cfr. “Traders are hedging against the futures market. It is a very skilful and risky bet,” a Singapore trader says. They are quoting a wide range of numbers and soliciting for bids. "The problem now is that nobody is buying," he adds. A cargo of 30,000 tonnes of 2.3mm and up thickness SAE 1006 HRC from China was previously ordered at $835/t cfr Vietnam on 11 November.

Kallanish lowered its SAE 2-2.7mm thickness HRC assessment to $830-835/t cfr Ho Chi Minh City, down $7.5/t on-week.

Source : Kallanish