Vietnam: Formosa Ha Tinh cuts HRC offers for Oct'24 sales

Vietnamese steel giant, Formosa Ha Tinh (FHS), has reduced its hot-rolled coil (HRC) prices by approximately $17/tonne (t) CIF m-o-m for shipments scheduled in October 2024. Following this adjustment, prices of SAE1006 skin-pass HRCs now range between $511/t and $520/t CIF, compared to the previous $528-540/t CIF in Ho Chi Minh City (HCMC). Non-skin pass coils are priced at $501-510/t CIF, depending on the volume booked. This price revision follows sluggish domestic demand and competitive imported HRC prices.

Key factors:

1. Imported HRC offers drop w-o-w: China's HRC export offers to Vietnam dropped by $15/t w-o-w to $485-490/t CFR against $500-505/t CFR HCMC. Chinese mills are operating at high-capacity levels, leading to a surplus of HRC. Moreover, few traders in China are also reporting increasing inventories of steel, indicating a mismatch between supply and demand. These factors have contributed to a softer market for HRC exports from China.

2. Anti-dumping probe impacts Vietnamese steel exports: The recent initiation of an anti-dumping investigation by India against Vietnamese HRC has dealt a significant blow to FHS, a major steel exporter from Vietnam. This investigation has effectively shut down the Indian market for FHS and other Vietnamese steel producers, as the Indian government seeks to protect domestic steel manufacturers from unfair competition.

3. Cautious mood amid volatile SHFE futures: Chinese HRC export offers decreased following the volatility in Shanghai Futures Exchange (SHFE) HRC futures, which have significantly declined m-o-m. However, on a w-o-w basis, the same increased by RMB 66/t ($9/t) to RMB 3,331/t ($467/t) against RMB 3,265/t ($458/t) the previous week.