Vietnam: Falling domestic offers lower bids for imported HRC

The Vietnamese HRC market witnessed price corrections from domestic producers by up to $58/tonne (t) for Feb'22 dispatches towards the middle of the previous week.

• Formosa Ha Tinh has cut prices by $58/t for Feb'22 delivery last week. Current prices stand at around $825/t CIF for HRC (SAE1006, skinpasses).
  
  
• Similarly, Hoa Phat has also reduced HRC prices to the tune of $40/t with prices ranging between $795-800/t CIF basis.
  
  

Imported HRC offers rangebound

• Indian mills maintain prices in the range of $790-810/t CFR for SAE1006.
  
  
• Offers from Chinese tier-I mills continued to hover at around $810-815/t CFR.
  
  

Factors impacting Vietnam's HRC market:

Buying preference linked to domestic products: The buying preference continues to remain pegged to domestically produced HRCs over the imported ones due to the delivery time lag. Also, the mills reduced prices to support the slow demand recovery amid increasing concerns over rising Covid cases.

Slow import demand for value-added products: Slow demand for value-added products from the key importing countries has also weighed on the HRC import volumes into Vietnam. For instance, the finished steel exports from Vietnam started a perpetual decline from 1.37 million tonnes (mn t) in Aug'21 to 1.02 mn t in Nov'21, basically impacted by slower demand from the EU region and the US, where most of Vietnam's value-added steel products are exported.

However, the Vietnamese exporters had catered to improving demand in the EU and the US during the lockdown phase of May'21-Aug'21 and reported higher export volumes.

Near-term outlook

If sources are to be believed, buying interest at quoted offers of Formosa Ha Tinh is slow and thus, the mill may offer some more discounts to the extent of $10-20/t on quoted offers. Trade participants said that limited buying interest at current offers of imported HRCs may keep prices under pressure in the near term.