Vietnamese HRC producer Hoa Phat Group has announced its new local prices for shipments in January and February, dropping them slightly on dollar basis by around $13/mt month on month. However, according to market insiders, the prices decrease is smaller than initially expected given that HRC offers from Chinese suppliers are around $20/mt lower. Besides, despite the decline in new offers, sentiments among market players have improved to some extent for prices in November.
More specifically, on November 1, the new prices from Hoa Phat Group for non-skin passed SAE1006 and SS400 HRC for December shipment have settled at VND 13,560-13,590/kg ($536-537/mt) CIF, where the lower end of the range corresponds to the price in northern and central Vietnam, while the higher price is found in the south. This means the current prices have increased by VND 60/kg as compared to last month, but given the depreciation of the local currency prices on dollar basis have lost around $13/mt month on month.
This move by Hoa Phat was expected by Vietnamese customers, though it is considered insufficient by most buyers given the more competitive offers for ex-China HRC coupled with the poor buying activity in Vietnam. In particular, this week offers for ex-China Q235/SS400 HRC have been voiced at $510-515/mt CFR, against $500-505/mt CFR reported last week. Besides, according to sources, even a few deals have been signed at $513/mt CFR, up by $10/mt week on week. Meanwhile, offers for Chinese SAE1006 HRC have been estimated at $525/mt CFR level, against $520-525/mt CFR last week.
“Chinese HRC futures prices have increased over the past week, but the upward trend has slowed down and most market insiders doubt there will be any significant rise,” a source said, adding, “Hoa Phat’s price correction has actually improved sentiments among Vietnamese buyers.”
As of November, HRC futures at Shanghai Futures Exchange are standing at RMB 3,559/mt ($501/mt), increasing by RMB 19/mt ($3/mt) since October 25, while down 0.89 percent compared to the previous trading day, October 31.
$1 = RMB 7.121
