The Vietnamese HRC market has remained weak in terms of both prices and demand, which has been confirmed by the recent move of the leading producer in the country, Formosa ha Tinh, to cut its official monthly prices even despite today’s boost in the mood in China.
On December 10, FHS announced prices for non-skin passed SAE1006 and SS400 HRC in the local market at the lowest level of $516/mt CIF for lots of 20,000 mt and above, while the price for the most popular tonnages of 10,000-20,000 mt stands at $520/mt CIF. The smaller lots will be offered at $523/mt CIF for 5,000-10,000 mt batches, at $526/mt CIF for 1,500-5,000 mt lots and at $529/mt CIF for 1,500 mt and less. As the result, depending on the volume, Formosa’s HRC prices have lost $18-19/mt on average to $516-529/mt CIF. “I would say that they cut offers by $10/mt from the previous levels as they were providing discounts since late November. In any case, these are among the best prices now,” an Asian trader commented. Offers for skin passed SAE1006 HRC from Formosa have been estimated at $525-530/mt CIF.
The move of the Vietnamese producer has been widely expected this week and it has come a bit earlier than expected. Moreover, some sources assess the prices as being very competitive and believe that the mill will manage to push significant volumes and to trigger the current subdued demand. “Even Hoa Phat is at $525/mt CIF minimum, and Vietnamese buyers have stopped importing SAE from China for some time already due to the AD issue,” a Chinese source said. Market sources are waiting for the announcement of the preliminary results of the investigation against Chinese HRC in January at the latest. Some rumours are circulating that they may be retroactive and at 20 percent on average, so the import market has been very weak. Even today’s increase in Chinese futures has failed to boost the mood in Vietnam.
Only a small deal for Chinese Q235 HRC was reported to have been done to Vietnam late last week at $490/mt CFR, versus previous offers at $502-505/mt CFR. “I am sure all the latest bookings to Vietnam are non-VAT, which is very risky business,” another trader said. On December 10, most offers from traders who still offer non-VAT material are at $500/mt CFR minimum, while others have been targeting $505/mt CFR or above. Indicative offers for Chinese SAE1006 HRC are stable at $515/mt CFR, though late last week an offer for non-VAT SAE1006 was as low as $505/mt CFR with no deal done, as reported by market sources.