Vietnam’s import HRC market has remained bearish this week and a few deals have been signed at lower levels. But trading has been mainly focused on Indian material as sellers from this country has been the most flexible, offers for Indonesian coils have decreased only slightly, while some Chinese exporters have not been ready to cut prices further with cost pressure intensifying towards the end of the week.
A deal for a combination of Indian SS400 and SAE1006 HRC has been done at $555/mt CFR as confirmed early this week, which is down by $10/mt from indications seen last week and almost $20/mt below the previous deal signed for the same origin in late May. Moreover, there has been a rumor about a sale of Indian coils at $552/mt CFR, though this has remained unconfirmed by the time of publication. “Indian mills are taking export orders for HRC aggressively. Mills are doing this to protect the pricing in the local Indian market as they sell approximately 80-85 percent of quantities locally,” a market source said. Also, a few trading sources in Vietnam have confirmed that there is some demand for import HRC at the current levels from small customers that cannot get discounts from Formosa, for instance (for large orders, the local price is $10/mt less).
Indonesian HRC prices have also softened but by much smaller margins. The official offer from the mill for August shipment stands at $568/mt CFR, down by $4/mt from late last week, while traders have been voicing $562-563/mt CFR, which is $3-5/mt lower than the level they gave last week.
As for Chinese HRC, there has been no similar trend. Offers for Q195 HRC with thickness of 3 mm and above have been heard at $506/mt CFR, similar to the previous sales for July shipment. One deal for 10,000 mt of Q195 HRC with early August shipment has been signed at $504/mt CFR this week. At the moment, offers are mainly for August. Some offers have been heard at an even slightly higher level due to the increase in costs. Chinese mills accepted a sixth round of local coke price increases early this week and the seventh round today. Chinese SPHC pickled and oiled coil offers have been heard and a small volume has been sold at $575-576/mt CFR, up by $5-6/mt from level seen in the latest deal.
As for the future trend, most market sources remain pessimistic. Even though the Chinese market has not indicated big declines recently, Indian mills may be interested in export sales in the coming weeks due to the local demand slowdown. “It may be the bottom for now, but I expect lower prices to re-emerge by the end of June,” a trading source said.
The SteelOrbis reference price for imported SAE1006 HRC in Vietnam stands at $552-563/mt CFR, with the midpoint at $557.5/mt CFR, $8.5/mt lower week on week.
