Following sharp increases in HRC prices from Chinese suppliers and traders for Vietnam at the beginning of this week, by Wednesday, June 7, the uptrend has been reversed with ex-China HRC offers falling back to last week’s levels due to an unexpected slump in futures prices in China.
More specifically, market insiders have reported new ex-China SS400 HRC offers at $545-547/mt CFR today, June 7, compared to $555-565/mt CFR at the beginning of the week, rolling back to the offers heard at the end of last week. Meanwhile, no firm offers have been voiced for ex-China SAE1006 HRC, though market participants estimate the indicative prices at $565-575/mt CFR, down by $15-20/mt from yesterday.
According to sources, the recent fall in ex-China HRC prices is mainly explained by the decrease in futures prices for HRC, which on Wednesday, June 7, lost around RMB 44/mt ($6/mt) from the previous day to RMB 3,721/mt ($523/mt).
“It is hard to explain the reason for this decrease, but, apart from futures prices weakening, we believe that slow demand and buyers’ resistance to higher prices was the key driver,” a Vietnamese trader told SteelOrbis.
Meanwhile, the majority of other suppliers have been staying out of the Vietnamese market so far. However, according to sources, one Japanese mill has sold around 15,000 mt in total of HRC to three Vietnamese buyers at $570/mt CFR this week. This information has not been confirmed by the time of publication, though according to most market insiders, “it is highly possible given the current market conditions”.
The SteelOrbis reference price for import SAE1006 HRC has moved to around $570/mt CFR, versus $585-590/mt CFR, given the sharp drops in ex-China offers and the information regarding the ex-Japan deal.