The situation in the Vietnamese HRC market has become bullish this week with buyers signing deals at higher levels and overall expectations regarding further hikes persisting. Market participants are also expecting the main local HRC seller, Formosa Ha Tinh Steel, to announce new prices at higher levels next week.
Offers for SAE1006 HRC from Chinese traders with positions have increased to $915-920/mt CFR, compared to the latest deals signed at $910-915/mt CFR last week. Meanwhile, Chinese mills have increased their offers by $5/mt to $940-950/mt CFR and one of the major Chinese mills has sold to Vietnam around 40,000 mt at $938/mt CFR this week. “There are still low prices from traders who are trying to sell short in Vietnam, but they mainly offer very limited volumes,” a market insider told SteelOrbis. Chinese traders who offered SS400 HRC at $890-900/mt CFR last week have increased their prices to $895-900/mt CFR this week, for late May-early June shipments.
In the meantime, after a deal for ex-Kazakhstan HRC was signed at $880/mt CFR Vietnam last week, new offers have been voiced at $900/mt CFR for June shipment this week. No deals have been reported so far.
Other foreign suppliers have continued to stay out of the Vietnamese market, focusing on higher-priced destinations. Thus, the indicative offer price for ex-Japan HRC has stood at $1,050/mt CFR Vietnam, while offers for ex-Taiwan coils are at around $1,010/mt CFR. “There were talks about some offers coming from India at $960/mt CFR Vietnam, but we are sure that this is not true considering their recent deals to Europe at $1,300/mt CFR,” an international trader stated.
Meanwhile, most Vietnamese HRC buyers expect local producer Formosa Ha Tinh to increase its prices for June shipment coils by around $50/mt compared to $930/mt CFR announced last month. “We expect that Formosa’s new prices will reach around $980/mt, considering that raw material prices are much higher now, including coking coal and iron ore, while fuel and sea freight prices have also increased. Besides, since China keeps a zero Covid policy and people cannot import Russian steel, there will be a temporary shortage of steel supply,” a Vietnamese mill’s representative said.
The SteelOrbis’ reference price for import SAE1006 HRC has moved to $915-938/mt CFR, compared to $910-920/mt CFR last week. The lower end of the range corresponds to position offers which are still coming to Vietnam from Chinese traders, while the higher end of the range corresponds to the latest deal signed with a Chinese mill this week.