The situation in the Vietnamese HRC market has continued to be bearish this week with buyers signing deals mainly for SS400 HRC at lower levels with Chinese suppliers. At the same time, sentiments have remained largely negative given no visible signs of a demand recovery, coupled with difficulties in opening letters of credit (LCs), while the Vietnamese dong has remained under pressure in the face of the persistent strength of the dollar.
Accordingly, this week has started with another sharp decrease in HRC prices from Chinese traders in Vietnam, bringing offers for ex-China SS400 HRC to Vietnam to $520-525/mt CFR for December and January shipments, compared to $535-540/mt CFR offered last week. According to market insiders, several deals have been reported at $520-523/mt CFR Vietnam, though most bids from Vietnamese have already been voiced at $510/mt CFR by Wednesday, October 26. “We heard some ex-China SS400 offers even at $515/mt CFR and slightly below, so it is likely that new deals will be done at levels of $510/mt CFR and below in the short run,” a Vietnamese trader told SteelOrbis.
Meanwhile, offers for ex-China SAE1006 HRC have been rare in Vietnam, with the indicative level standing at $550-560/mt CFR, down by $10-15/mt over the past week, though, according to market sources, some position offers have been heard at as low as $540/mt CFR. “Rumors have been invading the market. It is hard to say what the current workable level for SAE1006 HRC is, as we have not heard new deals so far, while Vietnamese banks cannot open LCs for steel buyers,” a market participant said.
In the meantime, suppliers from Japan and Taiwan, who were offering at $570/mt CFR last week, have been staying out of the Vietnamese market, focusing on boosting sales to other markets such as Europe and the Middle East. The indicative offer prices for ex-Japan and ex-Taiwan HRC have been reported at $560/mt CFR Vietnam. However, some sources believe that “the actual deal price should be at $550/mt CFR and below, given this level of offers heard from Japan and Taiwan in Pakistan this week,” as an international trader told SteelOrbis.
Offers from India have also remained limited in Vietnam this week, with the indicative price for boron-added HRC standing at $580/mt CFR, down by $5/mt on the higher end of the range week on week. “There are almost no offers for ex-India coils to Vietnam, only Tata Steel can offer there now,” a market insider stated.
The SteelOrbis’ reference price for import SAE1006 has moved to $550-560/mt CFR, down by $10/mt week on week, while lower offers are estimated by most customers to be bearish speculation, at least for now.