Vietnam: Imported HRC market silent post Formosa price cut

Imported HRC offers for China-origin hot-rolled coils (HRC, SAE1006) into Vietnam remained stable w-o-w. Subdued demand in Vietnam along with drop in domestic prices have kept offers stable. In addition, China's Shanghai Futures Exchange (SHFE) prices for January contracts also remained volatile.

Imported HRC offers

• Chinese HRC (SAE1006) offers were heard at $565-570/t CFR, stable w-o-w. Meanwhile, offers for SS400 grade were at $545-550/t CFR.
  
  
• Indian mills have put their offers on hold for quite a while.
  
  
• This week, no offers were heard from Japan, Taiwan, South Korea, and Russia either.
  
  

Factors keeping prices range-bound:

1. Volatile Chinese market: The Chinese steel market is currently volatile, with HRC futures on SHFE dropping by RMB 10/t ($1/t) d-o-d to RMB 3,882/t ($535/t). However, prices fell by RMB 58/t ($8/t) as against RMB 3,824/t ($527/t) a week ago. Currency depreciation in China is supporting low price levels; however, the Chinese government has introduced several policies and new measures to maintain a stable and positive economic trend.

2. Formosa cuts monthly HRC offers: Vietnam's Formosa Ha Tinh (FHS) has revised HRC (SAE 1006, skinpass) offers lower for late October-early November by around $13/t CIF m-o-m. Post revision, prices of skinpass HRC are in the range of $593-597/t CIF, depending on order volumes. Price cuts are due to the sluggish Vietnamese steel market with weak downstream demand from the construction and manufacturing sectors.

Outlook
The Vietnamese steel market remains mixed, with demand expected to be weak in the coming months. However, the recent price cuts by Formosa may help boost demand and support market sentiments.