On August 16, major Vietnamese producer Formosa Ha Tinh has announced its domestic hot rolled coil (HRC) and wire rod prices for October shipment. Despite market expectations that the producer would cut prices for HRC by up to $25/mt, Formosa Ha Tinh has announced only a $10/mt decrease from its price level announced for September shipment material.
As a result, the mill’s offers for SAE1006 grade skin-passed HRC are now at $531/mt CFR, with offers for HRC which has not been skin-passed at $526/mt CFR, and with SS400 grade HRC offers standing at $521/mt CFR. One of the reasons for such a small decline is “$15/mt compensation for last month,” a producer told SteelOrbis. In July, Formosa Ha Tinh claimed a $25/mt increase in its local HRC price, but agreed to sell coils to customers at $15/mt below the announced price. The pressure from the cost side was one of the major reasons not to cut HRC prices for October shipemnt by a bigger amount.
Nevertheless, taking into account current low-priced deals concluded for imported HRC in Vietnam, it is unlikely that Formosa Ha Tinh will be able to avoid discounts to conclude deals. The current difference between local and import HRC prices in Vietnam has reached $40/mt and even more, while it was about $15-20/mt a month ago.
Formosa Ha Tinh has also cut its local prices for mesh-quality wire rod by $15/mt for October shipment to $530/mt CFR.