Prices for import HRC in Vietnam have plunged this week as a number of Chinese sellers have been offered cargoes at much lower levels. As a result, the price gap between ex-China position HRC prices and prices from major mills from China, India and other countries has increased much. The future market direction is still unclear as rumours about the introduction of new export tariffs in China have emerged, so the sharp price fall may be stopped, market sources told SteelOrbis.
Late this week, the prices available for ex-China position SAE1006 HRC have been at as low as $980/mt CFR, down by $10-20/mt from the levels heard in the middle of the week. But buyers have been cautious in signing deals in such a rapidly falling market. Earlier this week, a contract for a position cargo from China was done at $1,010-1,015/mt CFR, as SteelOrbis reported earlier and, subsequently, one contract has been rumoured at around $1,000/mt CFR. “Prices are softening, so even lower numbers may be possible,” a source said, explaining the weak market activity.
Cheap position cargoes from China for lower quality coils and strips have been reported to Vietnam. Ex-China Q195 strip was sold at $920/mt CFR Vietnam early this week, while at the moment the tradable level is $900-910/mt CFR. Position SS400 HRC cargoes have been available at $960-970/mt CFR, while bids have been rare and all below $950/mt CFR.
As a result, the SteelOrbis reference price for import SAE1006 HRC in Vietnam, based mainly on the most competitive offers and deals, has come to $980-1,000/mt CFR on May 21, down by $60-70/mt from $1,050-1,060/mt CFR a week ago.
The further price trend in Vietnam is still unclear. Most major mills from India have still been asking for $1,100/mt CFR, with the lowest possible level being heard at $1,060-1,070/mt CFR. Moreover, the big Chinese big have not been as aggressive as smaller producers and traders from China, and are still offering at $1,030-1,040/mt CFR and far above.
In addition, rumours about the introduction of an export tariff on HRC in China emerged on Thursday, putting pressure on local Chinese prices, but giving hope that the sharp price fall in the export market will end soon. “If China cancels the tax rebate on CRC [exports] and puts export tax on HRC, the overseas prices will go up,” a source from Vietnam said.