After this week started with another drop in deal prices for ex-China SS400 HRC, by the middle of the week offers have shown some recovery, increasing by around $10/mt. However, according to sources, this increase is unlikely to last longer, given poor domestic demand both in China and Vietnam.
More specifically, following numerous deals for small tonnages of ex-China SS400 HRC at $540-545/mt CFR through traders in Vietnam, on Wednesday, August 23, ex-China SS400 HRC offers have increased to $554-555/mt CFR, according to sources. Such a price recovery is mainly explained by the better mood in China’s raw materials market, though most sources, do not expect any strong uptrend in the short run. “The main reason for the price growth is the sudden increase in iron ore prices, because steel mills have not implemented the policy to control production capacity. The output of molten iron continues to remain high, and iron ore inventory is at the lowest level in recent years,” a market insider told SteelOrbis.
Meanwhile, Vietnamese buyers are also rather sceptical as regards further upward movement. “We don’t see any significant demand recovery in Vietnam as August is a bad month for the steel industry given the weather conditions, the rainy season in particular,” a Vietnamese trader said.
In the meantime, in the SAE1006 HRC segment, offers have remined rare, while Chinese suppliers have been offering their materials at $572-580/mt CFR for October shipment, mainly the same as last week. “Some occasional higher offers have been voiced at $585/mt CFR, but in general the tradable level is still estimated at $575/mt CFR, though no fresh deals have been reported so far,” the representative of a Vietnamese mill told SteelOrbis.
Thus, the SteelOrbis reference price for import SAE1006 HRC has moved to $575/mt CFR, versus $568-575/mt CFR last week, based mainly on Chinese offers while other suppliers have been staying out of the market with indicative offers at $600-610/mt CFR from Japan, Taiwan and South Korea.