On August 19, local Vietnamese producer Formosa Ha Tinh Steel (FHS) announced its new HRC prices for domestic customers, having delayed its announcement by around one week. The new offers have been revised downwards, as expected by most market insiders, in line with the offers of the other Vietnamese producer Hoa Phat Group. However, most market insiders expected its new prices to drop more as new FHS’ offers are still higher than ex-China HRC offers by at least $45-50/mt.
More specifically, FHS’ prices for non-skin passed SAE1006 and SS400 HRC in the local market for September-October shipment have settled at $528/mt CIF for orders for a minimum 20,000 mt, against $560/mt CIF last month, while for 10,000-20,000 mt orders FHS’s new price stands at $531/mt CIF Vietnamese ports, down by $32/mt month on month. Besides, prices for smaller volumes, for 5,000-10,000 mt in particular, have settled at $534/mt CIF, down by $32/mt as well, and at $532/mt CIF for 2,000-5,000 mt, while for orders for a maximum of 2,000 mt new offers are voiced at $540/mt CIF.
In the meantime, offers for ex-China Q235/SS400 HRC in Vietnam have been falling sharply, decreasing to $455/mt CFR on Monday, August 19, down by $15-20/mt since the end of last week, and losing more than $60/mt over the past month. This decline is mainly due to the fall in HRC futures prices in China coupled with the extremely sluggish demand for Chinese coils globally caused by numerous antidumping investigations announced this month and the traditionally slow demand in August.
Meanwhile, no firm offers for ex-China SAE1006 HRC have been announced so far, though market insiders estimate indicative tradable prices at around $480/mt CFR and lower, against $485-490/mt CFR last week.
“We all expected lower prices from Formosa, but the new prices are higher than initially expected,” a market insider told SteelOrbis, adding, “Most were expecting new offers at around $500/mt.”
“Many Vietnamese traders have lost confidence, seeing no signs of a Chinese market recovery, and in the current conditions new prices from Formosa don’t have much sense, unless FHS will provide more discounts when signing contracts, or unless Chinese HRC prices recover,” a local producer said.