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Vietnam: Formosa hikes HRC offers by $20/t for Mar'24 sales

Hoa Phat increased monthly HRC prices by $40/t m-o-m for March-April. Hike in raw material and HRC import offers lift domestic HRC offers. Vietnamese steel major, Formosa...

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BigMint Bureau

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12 Jan 2024, 19:12 IST

Vietnam: Formosa hikes HRC offers by $20/t for Mar'24 sales

Hoa Phat increased monthly HRC prices by $40/t m-o-m for March-April.
Hike in raw material and HRC import offers lift domestic HRC offers.

Vietnamese steel major, Formosa Ha Tinh (FHS), has raised HRC prices by $20/t m-o-m for late March to early April 2024 shipments, as per the quantity booked. Subsequent to the revision, prices of HRC (SAE1006, skin pass) stood at $645-655/t CIF Ho Chi Minh City. Meanwhile, non-skin pass coils were assessed at around $640-650/t CIF.

Factors influencing offers:

1. Imported HRC offers rise m-o-m: Chinese HRC (SAE1006) export offers to Vietnam stood at around $600-605/t CFR Vietnam in January 2024 against $580-585/t CFR Vietnam levels in December 2023, rise of around $20/t. The Shanghai Futures Exchange (SHFE) HRC prices increased by RMB 22/t ($3/t) d-o-d to RMB 4040/t ($566/t) against RMB 4,018/t (563/t) a day ago.

In addition, Indian mills have resumed HRC export offers to Vietnam, which remained suspended since July 2023. Current offers are at $635/t CFR Ho Chi Minh City, Vietnam. Though the prices do not seem workable as the Chinese mills are still offering at much lower prices. However, bids are at $600/t, CFR.

2. Supporting price trends in domestic market: Hoa Phat, a leading Vietnamese steel producer, has announced a $40/t increase in its monthly HRC prices for sales between late March and early April 2024. This upward trend, brings the new prices to VND 15,653/kg ($640/t) in Ho Chi Minh City, excluding VAT. The price hike is primarily driven by two key factors: a sharp rise in raw material costs, and an increase in offers for Chinese imported HRC.

Outlook:
Vietnam's market sentiments are expected to remain positive due to improved demand and factors like higher raw material and import offers. In addition, the uptrend in flat steel market suggests that market demand for HRCs will likely to continue. Moreover, global prices are supportive, China's Baosteel has kept prices flat for Feb'24 shipments.