HRS offers given by Chinese mills to the Vietnamese market for October shipment are as follows:
Product | Price |
HRS 1.8 mm x 355 mm x C | $530/mt CFR |
HRS 2 mm x 355 mm x C | $525/mt CFR |
HRS 2.5 mm x 355 mm x C | $520/mt CFR |
On the other hand, 3 mm HRC offers given by Chinese mills to South Korea are at $520/mt CFR South Korea, also for October shipment. While Chinese mills' 3-12 mm HRC offers were two weeks ago standing in the range of $520-530/mt CFR Vietnam, materials below 3 mm were last week at the abovementioned levels despite the slight recovery in the local Chinese market. There are concerns that Chinese export offers are unlikely to see an easy recovery in the weak markets; i.e., Southeast Asia and the Middle East.
In spite of recent sales, it is mentioned in Southeast Asia that traders' stocks are still at high levels. In addition, given the impact of the tight availability of credit on the steel sector, traders are trying to sell import materials in their stocks to third countries. This trend is seen in particular in the Southeast Asian market and is caused by the cash shortage experienced by traders, who have put up their stocks as collateral against their debts, due to the decrease in steel prices.
Despite the decreases seen in coking coal and iron ore contract prices in the global market, it was thought that the increases in inventories in the Southeast Asian market during the April-July period this year were speculative. It is understood that the stimulus packages issued by the governments in this region created excessive expectations. In the period from August to September, HRC import offers in the region in question decreased by $90/mt on average.
On the other hand, on a positive note, on the end-user side in the Southeast Asian market, white goods and automotive sector data have shown a surprising improvement, though no recovery has been seen in the machinery sector, in shipbuilding and in container manufacturing. Thus, expectations for the future, especially regarding demand for high-end flat products; i.e., CRC and HDG, have switched to positive.
However, the mills in the region in question have continued to keep their current stocks for 4-12 mm HRC in particular at high levels, despite all the advice coming from governments and international institutions. As a result, it is forecast that the fourth quarter will be a difficult one for these mills.