Vietnam: Domestic mills steeply reduce HRC offers for July, early Aug

• Domestic mills steeply reduce prices by up to $130/t for July and early-Aug sales
  
  
• Buyers continue to prefer domestic HRCs over imported ones
  
  
• Indian mills temporarily withdraw from export markets as govt revises export duty structure
  
  

The imported HRC market in Vietnam slowed down this week after domestic steel majors Formosa Ha Tinh and Hoa Phat steeply reduced prices for hot rolled coils (HRCs) (SAE1006) for July and early-August sales last weekend.

• Formosa Ha Tinh cut prices by $95/t last week with current offers standing at around $855/t CIF Ho Chi Minh City (HCMC).
  
  
• Hoa Phat announced a steep reduction of $130/t in its offers, which now stand at $793/t CIF HCMC.
  
  

Vietnamese buyers continue to prefer domestic HRCs over imported ones. This trend has been in effect since the beginning of the current calender year amidst logistics challenges such as higher freight rates and tightness in availability of vessels and containers along with the longer lead times.

Moreover, sales volumes in the Vietnamese market witnessed a drop, impacted by the continual decline in offers from major exporting nations recently. Offers from China for HRCs (SAE1006) are being heard at around $785-790/t CFR Vietnam this week, which have steeply moved down from $845/t CFR at the beginning of May 2022 and $940/t CFR in mid-April.

Indian steel mills have temporarily withdrawn from the market after the government announced the levy of export duties on steel products, including HRCs, late last Saturday. All major mills are trying to understand the implications of the levy of the export duty @15% on finished steel products (including HRCs) on the deals concluded in the recent past.

Near-term outlook
Buyers are likely to continue procuring HRCs domestically till supplies run out, before shifting to imported material. Moreover, it is likely that offers from the exporting countries may increase due to the supply gap created by the withdrawal or lower export allocations from the Indian mills in the near future.