Chinese traders cut HRC offers for Vietnam, move by local mills awaited

Chinese HRC suppliers who were actively selling their materials to buyers all over the world last week, including Vietnam, have decreased their prices for May shipment position cargoes for Vietnamese buyers on Monday, March 14. This decrease was mainly caused by the drop in futures and local prices in China, though market insiders believe it is too early to talk about a downtrend as, in contrast to traders, Chinese steel mills are maintaining their prices at high levels.

Accordingly, this week has started with price decreases for HRC from Chinese traders in Vietnam. In particular, offers for ex-China SS400 HRC have been reported to Vietnam at $860/mt CFR, compared to the latest deals done last week at $870/mt CFR. “Some Vietnamese customers even heard offers at $850/mt CFR,” a market insider said. Besides, market sources have been discussing a deal for around 10,000 mt of Chinese SS400 HRC done at $865/mt CFR Vietnam. However, this information has not been confirmed by the time of publication. Offers from Chinese traders for SAE1006 HRC have been heard at around $900-910/mt CFR, compared to the latest deals done last week at $910/mt CFR.
This decrease is mainly connected to worse sentiments in the Chinese futures and local HRC markets. In particular, on Monday, March 14, domestic HRC prices in China have fallen by RMB 80/mt ($13/mt) compared to March 11 to RMB 5,045/mt ($793/mt) ex-warehouse, according to SteelOrbis’ data. Meanwhile, Chinese HRC futures prices have lost RMB 187/mt ($29/mt) since Friday, March 11, to RMB 4,950/mt ($778/mt). However, although Chinese traders have been trying to go lower, Chinese mills are still sustaining their prices for SS400 HRC at $880-900/mt FOB. “Distributors are reluctant to sell at a low price considering the current declining inventories. Besides, Chinese HRC exporters have an obvious price advantage as global steel prices continue surging, so we do not think there will be any sharp downtrend in the short run,” a market insider told SteelOrbis.

“Vietnam is still awaiting Formosa Ha Tinh Steel’s new price announcement. They will probably announce them in two to three days. Last week, most customers were expecting $920-930/mt CIF, but now some are expecting lower offers. Anyway, new prices will not be lower than $900/mt CIF, because HRC supply is tight in the market,” the representative of a Vietnamese mill stated.

The SteelOrbis reference price for import SAE1006 has moved to $900/mt CFR, compared to $910/mt CFR last week, considering the lower position offers from Chinese traders.