Vietnam: Formosa cuts HRC offers by $15/t m-o-m for Dec'23 sales

Vietnamese steel major, Formosa Ha Tinh, has reduced HRC prices by $15/t m-o-m for late- November and early-December 2023 shipments. Subsequent to the revision, prices of HRC (SAE1006, skin pass) stood at $580/t CIF Ho Chi Minh City. Meanwhile, non-skin pass coils are assessed at around $575/t CIF.

Factors driving down offers

1. Fall in imported HRC offers:

• China: HRC (SAE1006) was heard offered at $555-560/t CFR Vietnam this week. Moreover, imported HRC offers dropped by $10-15/t CFR m-o-m against $570/t CFR a month ago.
  
  
• Indian mills are out of the market, due to higher domestic realisations.
  
  

2. Global steel producers keep offers firm: Global steel producers have either decreased or kept their offers unchanged for HRCs. For instance, China's Baosteel kept its monthly HRC prices unchanged due to subdued demand in the domestic market. While Japan's Tokyo Steel and Taiwan's China Steel Corporation (CSC) have also rolled over steel prices for November sales. However, Hoa Phat has reduced monthly HRC (SAE1006, non-skinpasses) prices by VND 240/kg for November 2023 sales.

3. Chinese HRC futures plunge m-o-m: Chinese HRC futures (January 2024 contracts) on the SHFE plunged m-o-m along with the decrease in domestic HRC prices. Settled prices of HRC futures were at RMB 3,749/t ($513/t) on 19 October, down RMB 195/t ($27/t) m-o-m against RMB 3,944/t ($540/t) on 19 September. Chinese futures have been volatile ever since the market reopened after the Golden Week holidays.

4. Vietnam steel exports fall m-o-m: Domestic demand and trade activities in the Vietnamese market continue to remain subdued. Moreover, exports have also shown a downward trend as Vietnam's steel exports fell by 16% m-o-m to 764,165 tonnes (t) in September 2023 from 912,164 t in August,