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Vietnam: Formosa Ha Tinh revises HRC offers for Jun-Jul'24 sales

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BigMint Bureau

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15 Apr 2024, 16:02 IST

Vietnam: Formosa Ha Tinh revises HRC offers for Jun-Jul'24 sales

Formosa Ha Tinh cuts HRC prices to counter competition

Company maintains VND-denominated prices while reducing USD prices

Fluctuations in China's steel futures seen

Vietnamese steel major Formosa Ha Tinh has reduced HRC prices by $10/t m-o-m for Jun-Jul'24 shipments. However, the company has maintained its Vietnamese dollar (VND) denominated list prices for the same. Subsequent to the revision, prices of HRC (SAE1006, skin pass) stand at around $585-595/t CIF Ho Chi Minh City (HCMC). Meanwhile, non-skin pass coils are at around $580-590/t CIF, sources informed BigMint.

Factors behind lower offers:

1. Competitive imported HRC offers:

Chinese HRCs (SAE1006) offers dropped m-o-m by $5/t to $560/t CFR HCMC last week, against $565/t CFR HCMC in the same period a month ago. Offers for HRCs (SS400) stood at around $550-555/t CFR HCMC in Mar'24.

Indian HRC export offers to Vietnam also dropped sharply by $38/t m-o-m to $567/t CFR HCMC last week against $605/t CFR HCMC in the same period last month.

2. Formosa reduces prices to counter competitive pressure: Formosa has made the strategic decision to reduce prices in response to competitive pricing adjustments from both domestic and international competitors. Its domestic competitor, Hoa Phat has recently decreased its monthly HRC (SAE1006, non-skinpassed) prices by $40-45/t for June-July'24 sales. Post-revision, the effective prices stand at $553/t or VND 13,740,000/t, excluding VAT. Additionally, China's Baosteel has implemented a $14/t reduction in HRC prices for sales in May 2024 amid subdued global sentiments.

Furthermore, decreased exports, sluggish domestic construction activity, and a recent decline in imported HRC offers have prompted Formosa to adjust its pricing strategy in order to remain competitive and maintain market share.

3. Market participants remain cautious amid fluctuating Chinese prices: Vietnamese steel importers are taking a wait-and-see approach this week. The recent rise in China's steel futures market has created uncertainty in the Global market, leaving buyers cautious. As a result, Vietnam's steel market remained quiet, with fewer trade activities taking place as importers hold off on making purchases until they have a clearer picture of future steel prices.

In addition, China's Shanghai Futures exchange (SHFE) rose by RMB 80/t ($11/t) w-o-w to RMB 3775/t ($521/t) against RMB 3695/t ($510/t). The same inched up d-o-d by RMB 7/t ($1/t) against RMB 3768/t ($520/t).