Vietnamese HRC producer Formosa Ha Tinh has dropped its local prices for January deliveries by $40/mt due to the sharp declines seen in ex-China prices over the past two weeks and still bearish sentiment.
Formosa Ha Tinh has announced re-rolling grade SAE1006 HRC (non-skin passed) prices in the local market at $880/mt CFR, down by $40/mt from the previous month, while for skin-passed SAE1006 coils the price level has been dropped to $885/mt CFR. Prices for SS400 have come to $875/mt CFR. The decision to cut prices came after sharp drops seen in the Chinese HRC spot market and the recent cut by Baosteel in the local market by $47/mt.
The base price for SAE1006 HRC from Formosa to the export market has been set at $870/mt FOB.
“Local producers need to lower prices to secure sales in the market. Hoa Phat is expected to enter [the market] with $850/mt CFR [down from $895-900/mt CFR last month],” a source said.
The imported HRC, especially from Chinese traders, has shown rapid falls over the past two weeks. One small contract for a position cargo of SS400 HRC from a trader for February-March shipment has been heard at $795-800/mt CFR Vietnam, while similar grade coils were sold at $810/mt CFR earlier this week. The lowest offers for SAE1006 HRC from traders have been at $810-830/mt CFR recently, but no new deals have been reported so far.
Chinese mills’ prices have been showing less flexibility. After a contract for January shipment from one of the major mills at $850/mt CFR, now it is possible to get $845/mt CFR or $840/mt CFR, but hardly lower.
The SteelOrbis reference price for imported SAE1006 HRC is at $830-850/mt CFR, down by $12.5/mt on average over the week.