The weak demand for finished steel products in the local market in Vietnam has continued to put pressure on sentiments and, as a result, the second largest HRC supplier in the country has decided to drop prices by almost $50/mt.
The new prices from Hoa Phat Group, including SAE HRC, have come down to $970/mt CIF to north Vietnam and to $975/mt CIF to south Vietnam for August-early September shipments. This indicates a $47-48/mt drop compared to the previous month.
This is after Formosa Ha Tinh announced stable prices a few days ago. “Domestic demand is weak these days,” a trader said, which has led to the cut by Hoa Phat. “Material SAE1006 [from Hoa Phat] is unstable, and not suitable for many customers,” he added. Also, another source said, “Each customer can only buy 1,000-3,000 mt.”
Though such a price cut by Hoa Phat has been not expected by market participants, it is reasonable as local demand has been hit hard in the past two weeks due to increasing cases of Covid-19 and restrictions in the country, slowing local end-user industries, construction in particular.
Among the lowest offers for import HRC were position cargoes for SAE1006 HRC from China at $930-950/mt CFR, but demand for it has been very low and no new deals have been heard. “Demand depends on customers, on whether they can export to the EU and the US or not. If the customer can export, demand is not bad,” a local source said. US customers demand of Vietnamese HDG suppliers that the HRC feedstock they use should not be produced in China, and so the re-rollers rely mainly on local purchases of HRC for their finished product exports.
Major Chinese exporters have been still voicing high official offers for SAE1006 HRC - at $1,010/mt CFR Vietnam as minimum.
The SteelOrbis reference price for import HRC remains at $965/mt CFR on average for now. “The market needs a clearer direction,” a local source said.
No fresh sales of products of other origins (Indian, Japan or Taiwan) have been reported in Vietnam recently. Indian sellers have rejected any price below $1,020/mt CFR, while official offers are still at $1,050/mt CFR.
The nominal price level for ex-Japan SAE1006 HRC has remained at $1,100/mt CFR in Vietnam as availability has been limited and customers have not been ready to book even in the event of some discounts. Meanwhile, a deal for ex-Japan HRC has been done to Indonesia at $1,060/mt CFR, SteelOrbis has learned.