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Vietnam: Formosa Ha Tinh lifts HRC offers by $45/t for May deliveries

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BigMint Bureau

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11 Mar 2021, 17:03 IST

Vietnam: Formosa Ha Tinh lifts HRC offers by $45/t for May deliveries

Vietnam's integrated domestic steel manufacturer- Formosa Ha Tinh raised its HRC offers sharply by $45/t on a monthly basis for May deliveries, SteelMint learned from company officials. Last month the company had announced a roll over in its HRC prices for Apr'21 deliveries.

A steep hike in imported HRC offers from major exporting nations mainly China and Indian compelled the mill to increase prices.

Current offers of FHS

HRC (SAE 1006, skin pass) is being offered at around $770-775/t CIF basis. The last offer was at a $725-730/t CIF basis.
HRC (non-skin pass) offer stands at $765-770/t CIF basis against the last offer of $720-725/t CIF basis.

Key indicators driving steel prices in Vietnam-

1.Increase in imported HRC offers from China- Chinese mills have been significantly raising their HRC offers post-Lunar/Tet. Price rally in the futures market has lent support to higher prices from China. In addition to this, possible export rebate cuts and surging marine-freight costs were the major drivers of higher prices. Thus, currently Chinese mills were offering a $760-770/t CFR basis registering a hike by $65-70/t m-o-m.

2. Vietnam importers concluded few deals of HRC from India- Indian steel mills actively exported HRC to Vietnam for Mar-Apr shipments.
Deals concluded last week-

An Eastern India based major steel mill booked around 30,000 t HRC to Vietnam at $738-740/t CFR basis for end Apr- May shipments.
Another deal of a Western India based player was heard to be under negotiations at a price level of around $745/t CFR Vietnam.
A major private steel mill has concluded an HRC deal of about 20,000 t at $735-740/t CFR basis for end Mar-Apr shipments.

Meanwhile, it is learnt that steel mills are targeting to increase HRC offers to around $760-770/t CFR basis for May deliveries.

3.Baosteel sharply raised HRC prices- China's leading steelmaker- Baosteel has released its flat steel product list prices today for Apr '21 delivery. As per the company's official publication, the list price for HRC and heavy plates has been increased by RMB 300/t ($46). Thus, following the uptrend in Baosteel prices, company officials also raised HRC prices in Vietnam in similar lines, SteelMint understands this from its Vietnam sources.

4.Nation's steel industry expected to grow by 5% this year- Vietnam's steel industry is expected to register a growth of 5-6% this year, with global demand recovering mainly in developed markets, according to the Vietnam Steel Association (VSA). Other drivers for growth include expectations of rising public investment in infrastructure and the recovery of the real estate market. This will result in improved demand for steel in the near term.

Outlook- With the rising international prices and robust growth in demand, domestic and imported HRC offers are expected to remain high in the near term.