Import prices for hot rolled coils (HRC) in Vietnam have dropped again this week due to still ample supply from China, India and other countries. At the same time, the weak demand in what is one of the major markets in Asia has put additional pressure on prices and, since customers are cautious about purchasing any significant volumes at the moment, the bearish sentiment in the market will continue in the near future.
The workable prices for SAE1006 HRC have lost $10/mt from last week to $455/mt CFR Vietnam. A deal for a small tonnage from one of Chinese mills has been closed at $456/mt CFR, while the freight cost has gone down to about $10/mt from China to Vietnam. Most bids have been heard at about $450/mt CFR. Offers for SS400 HRC from Chinese mills have been at $450-460/mt FOB, while the tradable level is $445-450/mt CFR.
Major Indian integrated steel mills have been offering SAE1006 HRC at $455-460/mt CFR Vietnam this week, while suppliers from Taiwan have been asking for $460/mt CFR Vietnam. But no new deals have been heard in the market. “Vietnamese buyers are either silent or indicating below $450/mt CFR,” a local trader said.
An offer for small coils from Ukraine has been heard at $430/mt CFR to Vietnam, but even this price has failed to attract customers so far. According to sources, a supplier has about 30,000-60,000 mt to sell to alternative destinations, as it usually focuses on supply only to the MENA region. While Vietnamese customers are in wait-and-see mode, some tonnage of coils from Ukraine has been sold to Pakistan at approximately $430/mt CFR.
Weak demand for HRC in Vietnam has been not just because customers have been waiting for better prices, but also because the spread of the coronavirus has negatively affected consumption and exports of higher-value-added products. Some HRC volume, originating from India and China, which has just arrived in Vietnam, has been offered for re-export “maybe because this is a position cargo and Vietnam can't absorb. So "the cargo owner needs to find a customer somewhere else to solve this,” a Vietnam-based trader told SteelOrbis.
