On August 13, Vietnamese steel producer Formosa Ha Tinh (FHS) announced new local prices for HRC for September-October deliveries, lowering its prices by just $15/mt compared to the previous month. As demand in Vietnam has been hit hard by the outbreak of Covid-19 and regional lockdowns recently, most market sources believe that such a modest price decline from the main local HRC producer is due to the lack of any significant pressure from unsold volumes thanks to export sales lately.
Formosa Ha Tinh’s prices for rerolling grade SAE1006 HRC (non-skin passed) in the local market have been heard at $955/mt CFR or just slightly above at $960/mt CFR for some customers, down from $970/mt CFR in July. Offers for SS400 are at $950/mt CFR. “Vietnam’s local demand is weak, but the ASEAN market is recovering. The EU and Mexico have good consumption, so FHS [Formosa Ha Tinh Steel] does not have enough volume to sell in this period,” a local source said.
The import HRC market in Vietnam has remained weak with most offers for ex-India re-rolling grade coils being at $930/mt CFR. At the same time, buyers have been bidding at $900-910/mt CFR for ex-India HRC, too low for Indian sellers, who may focus on sales to alternative destinations.
In such a situation, the most attractive option for Vietnamese buyers could be purchases of ex-Russia HRC. According to sources, last week in total 35,000 mt of ex-Russia SAE1006 HRC were traded in the range of $908-910/mt CFR. This week, traders have started to collect bids at $890-900/mt CFR in Vietnam, seeing a further weakening of sentiment among buyers, but new sales have not been confirmed so far.
Offers from other exporters have been either disappearing (like offers from China) or coming at much higher levels. Offers for ex-Japan 2mm HRC have started to come to Vietnam at $1,080-1,100/mt CFR.
The reference price for imported SAE1006 HRC in Vietnam has been at $900-920/mt CFR this week: the lower end has slipped by $8/mt and the market is waiting for new deals.