Vietnam: Imported China-origin HRC offers rise w-o-w as local mills exhaust Sept allocations

Imported offers of China-origin hot-rolled coil (HRC SAE1006) into Vietnam rose by $10-15/tonne (t) w-o-w this week. Improved domestic demand in the Vietnamese market led to a hike in imported offers. In addition, Vietnamese steel majors Hoa Phat and Formosa Ha Tinh have sold out their domestic HRC allocations for September on strong demand.

Imported HRC offers-

• Chinese HRC (SAE1006) offers were heard at $585-590/t CFR against $575-580/t CFR last week.
  
  
• No offers were heard from Indian mills.
  
  
• Offers from Japan were heard at $610-620/t CFR, though allocations were limited.
  
  
• No offers were heard from Taiwan, South Korea and Russia this week.
  
  

Domestic supplies dry up on strong buying: Vietnam's domestic steel majors, Hoa Phat and Formosa Ha Tinh, have exhausted their allocations for September 2023 sales despite a price increase of $10-15/t m-o-m to $578/t CIF and $595/t CNF Ho Chi Minh City (HCMC) respectively, informed some local trade sources. This indicates improved demand in the country.

China's steel market up amid recent positive policies: China's National Development and Reform Commission (NDRC) announced plans to introduce measures to improve demand in the country, after economic data fell short of expectations and GDP growth forecasts were lowered. The NDRC aims to restore and expand consumption, stabilise large scale consumption, increase consumption of automobiles and electronic products, expand consumption in rural areas, and optimise the consumption environment. This, in turn, boosted sentiment in the Chinese market and led to an increase in domestic and export steel prices.

SHFE HRC futures (October contract) rose sharply by RMB 110/t ($15/t) w-o-w to RMB 3,932/t ($547/t) today as against RMB 3,822/t ($532/t) last week.

Outlook

Even though the Chinese steel market is trending up, no major transactions from Vietnam for imported HRCs were noticed last week apart from small parcel bookings. Thus, the outlook remains mixed.