Major Vietnamese mill Hoa Phat group has announced its new prices for the local market for September, cutting them by $14/mt, but even though the decline had been awaited, most market sources said they had expected lower levels from the producer in the current market conditions. At the same time, import HRC prices, especially from traders, have continued to drop, coming closer to $500/mt CFR, signaling that the market mood remains extremely bearish.
Hoa Phat's prices for non-skin passed SAE1006 and SS400 HRC for September delivery have eased to VND 14,060-14,090/kg ($535-536/mt) CIF (excluding VAT), down by VND 400/kg or $14/mt on dollar basis. This is much lower than the $34/mt drop seen in July. Some market sources had been waiting for a bigger decrease from Hoa Phat this month, considering the non-stop fall in import HRC prices. But it seems that better sales volumes both locally and in export markets in the previous month have supported the producer's positions and so the price correction has been rather conservative this month. According to market sources polled by SteelOrbis, Hoa Phat managed to sell over 700,000 mt of HRC in July.
Nevertheless, local sources in Vietnam have said that sentiments are still very poor with import prices continuing to slide. The latest offers for Indian or Indonesian SS400/SAE1006 3 mm HRC from traders have been heard at $504-505/mt CFR, down from the previous offers and deals for import coils in Vietnam at $510-512/mt CFR. Mills have been resisting further declines, trying to keep prices from falling below $510-515/mt CFR. “Lower bids have continued to come, but Indian mills say that the Vietnamese levels are not workable,” a local Indian source said. “We do see these low offers at $504/mt CFR even if they are from traders [in short positions],” a Vietnam-based source said.
Some market sources in Asia said that, in the local market in Vietnam, re-rollers can manage to achieve discounts and get $515-522/mt CIF, but, even with these lower prices some buyers will be interested in purchases of lower-priced import HRC.
The SteelOrbis reference price for import SAE1006 in Vietnam has settled at $504-505/mt CFR, down by $6.5/mt from last week and down by as much as $31-40/mt over the past month.
The downtrend has also continued in ex-China HRC offers and has even been aggravated on Monday with a sharp drop in futures. The latest price level for ex-China Q195 HRC in Vietnam is at $492/mt CFR, down by $4/mt from the previous booking level for this grade. The indicative level for ex-China SS400 in Vietnam has been assessed at $505/mt CFR, versus the previous $505-510/mt CFR.
“Due to the continuous low demand, the market lacks confidence and steel futures have dropped faster by one to two percent. Mills' outputs will be cut again if this continues,” a Chinese trader said. The SteelOrbis reference price for tradable SS400 has fallen by $2.5/mt since Friday to $482-487/mt FOB, while some market sources say that they expect deals at $480/mt FOB shortly.
