The significant number of lower-priced ex-China HRC offers is still impacting Vietnam’s import market. Some cargoes have been booked from both Chinese traders and mills, but overall activity has not been strong, as most customers have been cautious, waiting for the local price announcements and believing that import prices have not reached the bottom yet.
One deal from a big Chinese mill for 10,000-20,000 mt of SAE1006 HRC was confirmed as done at $850/mt CFR for January shipment late last week. As freight rates have come down recently, this price translates to $810/mt FOB at the lowest, sources have said.
Similar grade HRC but from traders for position cargoes for February shipments are available at $820-830/mt CFR, but customers are mostly cautious as regards buying with longer lead times.
A contract for a position cargo of SS400 HRC from a trader has been done at $810/mt CFR for February shipment.
At the same price, Dexin Steel sold a trial cargo of HRC to Vietnam last week, but after this no new offers have been reported from this supplier.
Buyers from Vietnam are not in a rush to conclude import coil purchases, seeing continued bearish sentiments in the Chinese local market. Local HRC prices in China have dropped by RMB 220/mt ($34/mt) today, coming to RMB 4,745/mt ($742/mt) ex-warehouse on November 10, according to SteelOrbis, after another day of sharp falls in futures prices at Shanghai Futures Exchange.
New offer prices for ex-Japan SAE1006 thin HRC have been reported at $890-900/mt CFR and the same level may be offered from South Korea, according to buyers.
In addition, local HRC producers Vietnam Formosa Ha Tinh and Hoa Phat are expected to announce their new prices by the end of this week. For Hoa Phat, sources believe that the producer will have to adjust prices down visibly, to $850/mt CFR or so. But for Formosa the expectations differ. For instance, some market participants even do not exclude the stabilization of prices for local customers due to high costs, expected firm demand and as “there is no selling pressure. They sold out all allocation for December,” a trader from Vietnam said.
The SteelOrbis reference price for imported SAE1006 HRC has been cut to $830-850/mt CFR, down by $12.5/mt on average from late last week.
