Following the weakening in the Vietnam’s HRC import market seen last week and at the beginning of this week, import HRC prices have continued to plunge given further decrease in ex-China offers as news about Chinese government to stimulate economic recovery failed to support market sentiments. At the same time, by Friday, August 18, local producer Formosa Ha Tinh Steel, has revised it offers downwards for domestic customers following the initial price announcement back on Monday.
More specifically, after the announcement of new local HRC offers on Monday, August 14, by the end of the week Formosa Ha Tinh has decided to revise its offers, declining them by around $13-21/mt CFR to $609/mt CIF for both SAE1006 and SS400 skin-passed and non-skin passed HRC. “The decision is quite understandable given the pressure from ex-China HRC offers,” a Vietnam’s buyer said.
Meanwhile, import offers for ex-China SS400 HRC have settled at $545-548/mt CFR, same as at the beginning of this week and down by $8-10/mt week on week, with several deals reportedly done at $545/mt CFR, according to sources. Meanwhile, offers for SAE1006 HRC from Chinese traders have slumped to $568-575/mt CFR, down by $575-580/mt CFR at the beginning of the week. “Although market was very excited with Chinese government’s announcement about the cut in policy interest rates, the reality is far from perfect due to sustained weakness of demand. Besides, weaker yuan against the US dollar dragged down ex-China HRC export offers,” a market insider told SteelOrbis.
“If yuan keeps weakening against the US dollar, which is very possible amid monetary easing in China, export HRC offers of Chinese suppliers will be affected further,” a Chinese trader said.
The SteeOrbis reference price for import SAE1006 HRC in Vietnam has settled at $568-575/mt CFR, versus $580/mt CFR at the beginning of this week, based mainly on the most competitive Chinese offers while other suppliers have been staying out of the market with indicative offers at $600/mt CFR and above from Japan and Taiwan.