Imported HRC offers for Vietnam rise upto $10/t, buying interest limited

The imported HRC offers in Vietnam have witnessed an increase of $5-10/t after Chinese steelmakers made a come back from holidays. Offers from China, Japan and Korea have gone up, however, Indian mills are still not active in the export market. The market has bounced back, shared Vietnam based importers.

• Chinese offers rise by $10/t on recent production cuts- Chinese steel manufacturers increased their HRC export offers to Vietnam to $520-525/t CFR Vietnam as the market resumed after the Golden Week holidays. Strong domestic demand and production cuts at Tangshan supported price hike in domestic as well as in exports.
  Tangshan government has imposed production curbs to control air pollution in the city, with effect from 1 Oct '20 to 31 Mar '21. The recent circular has directed B and C grade mills with supporting facilities such as sintering, smelting, rolling and lime kiln to limit blast furnace operating rates by 10-45%.
  
  
• Japanese and Korean mills raise offers- Following the suit, the Japanese and South Korean mills have also increased their offer by around $5/t and offering at $545/t CFR Vietnam as against $540/t CFR towards the end of Sep '20.
  
  
• Indian mills continue to hold export offers for Vietnam- Indian mills continue to hold back offers for Vietnam on higher domestic realizations and improved domestic demand. Also, the mills have been tracking the global HRC export offers since the offers had started to decline.
  
  

However, on the other hand, Vietnam based importers were holding back their purchases and have been observing the market trend. Also increased capacity in the domestic market may further reduce reliance on imports.

• Hoa Phat's Sept steel output exceeds Formosa's production- Hoa Phat recorded its best-ever crude steel production volumes at 590,000 t, surpassing Formosa Ha Tinh as Vietnam's largest steel producer in Sep '20. The company has recorded 4 mn t of crude steel output in the first 9 months of CY '20, a 100% increase in CPLY.
  
  
• Formosa expected to revise offers shortly- Formosa Ha Tinh, is expected to announce its prices for the Dec '20 deliveries in the next few days.
  
  

Outlook- Thus importers are hesitant to make fresh purchases at higher offers. Also, Hao Phat has been ramping up its capacity and Formosa Ha Tinh accounts for a major portion of HRC sales in the domestic market. This is expected to reduce reliance on the imported HRC in Vietnam's market.