Vietnam: Formosa raises HRC offers m-o-m for Feb'24 sales

Vietnamese steel major, Formosa Ha Tinh, has raised HRC prices by $25-35/t m-o-m for February 2024 shipments, according to the quantity booked. Subsequent to the revision, prices of HRC (SAE1006, skin pass) stood at $625-635/t CIF Ho Chi Minh City. Meanwhile, non-skin pass coils are assessed at around $620-625/t CIF.

Factors influencing offers:

1. Improved imported HRC offers:

• China: HRC (SAE1006) was heard offered at $580-585/t CFR Vietnam this week. Chinese prices are on a higher side amid increased SHFE HRC futures and production cuts in China
  
  
• Indian mills are out of the market, due to higher domestic realisations.
  
  

2. Supporting price trends in global market: Global steel producers have increased HRC offers. For instance, the world's top steelmaker Baosteel has increased HRC and thick plates prices for Jan'24 sales by RMB 200/t ($28/t) m-o-m, sources informed SteelMint. The company raised its prices in response to the recent surge in Chinese domestic steel prices and SHFE HRC futures. In addition, the political bureau meeting held on 8 December, 2023 emphasised on expanding domestic demand.

Moreover, domestic mills in Vietnam also raised HRC prices, Hoa Phat raised monthly HRC (SAE1006, non-skinpasses) prices for March 2024 sales by $30 m-o-m. Post-revision, effective prices stand at VND 14,680/kg or $600/t CIF HCMC (southern region) against previous price of VND 14,020/kg ($570/t) excluding VAT.

Outlook:

The Asian HRC market is expected to remain strong in the near future, supported by rising raw material costs, concerns about future supply, and a seemingly improving demand outlook in Vietnam. However, it is crucial to be aware of the potential risks and uncertainties that could impact the market in the months to come.