Vietnam: Formosa Ha Tinh steeply lowers HRC prices by $95/t for July sales

Vietnam's leading steel mill, Formosa Ha Tinh (FHS), has steeply lowered its monthly HRC offers for July sales, sources informed SteelMint. The revised offer for skin-pass HRC (SAE1006) stands at $855-860/t CIF Ho Chi Minh, while that of pipe making grade (SS400) stands at $850/t CIF.

Factors behind the drop in offer-

• Decline in imported HRC prices: To offload increased inventories in the domestic market amidst severe Covid outbreak, Chinese mills started offering at low prices in the overseas market. For instance, HRC (SS400) offer from China stands at around $785/t CFR Vietnam as assessed on 17 May 2022, down by $120/t m-o-m. Lucrative offers from China besides sluggish domestic demand pulled Indian HRC export index down sharply by $120/t to $820/t FOB east-coast as on 17 May, from $940/t east coast a month ago.
  
  
• Bid-offer disparity in Vietnam market: Indian mills reduced their offers for SAE1006 grade HRC to $810-840/t CFR as compared with $840-850/t CFR heard towards the end of the previous week. Furthermore, Chinese offers also dropped to $775-790/t CFR compared with last week's levels of $790/t CFR. However, buyers were heard bidding at around $730/t CFR. Some lower-priced indications from Russia kept buyers hesitant in placing fresh orders.
  
  
• Subdued domestic demand: The monthly steel sales of Vietnamese integrated steel major Hoa Phat dropped by 28% in April to 0.60 mnt as against 0.83 mnt in March. High construction steel inventories in the market from last month weighed on the sales volumes, the company said. Meanwhile, crude steel production declined by 3% to 0.73 mnt in April against 0.76 mnt in March.