Vietnam: Imported HRC offers drop by up to $20/t w-o-w from China

Imported Chinese-origin hot-rolled coil (HRC) offers into Vietnam dropped w-o-w amid volatility in futures prices. Chinese mills dropped their offers by $10-20/tonne (t) w-o-w, as per SteelMint's records.

Current week's imported HRCs offers:
Chinese HRCs (SAE1006) were heard being offered at $680-700/t CFR, down by $10-20/t as against $700-705/t CFR last week. Offers for HRCs (SS400) stood at around $670-685/t CFR.

Indian mills here are more focused on the higher realisation being fetched from the European market.

Japanese and South Korean mills continued to focus on better opportunities in the US market and Gulf countries.

Meanwhile, no offers were heard from Russia this week.

Factors impacting imported HRC offers:

1. High preference for domestic products: Vietnamese buyers are more inclined towards domestic supplies amid shorter delivery lead times. Formosa Ha Tinh (FHS), Vietnamese steel major, announced its domestic HRCs (SAE1006, skin passed) prices at $732/t CIF Ho Chi Minh City (HCMC) for May and early June 2023 sales.

It can be recalled that Vietnamese buyers had consumed domestically produced HRCs for April and early May 2023 deliveries despite higher prices.

Hoa Phat's domestic HRC sales were recorded at 186,000 t in February 2023, significantly higher than 86,000 t a month ago. Overall steel sales (including construction steel, HRCs, and billets) stood at 475,000 t in February.

2. Volatility in Chinese futures weigh on export offers: The Chinese HRC offers edged down this week amid weak buying interest in Vietnam for the imported material. Moreover, Chinese HRC futures declined over the last three working days. Chinese HRC (May 2023 contract) futures on SHFE settled at RMB 4,344/t ($632/t), down by RMB 95/t ($14/t) d-o-d and w-o-w. This volatility in futures prices has weighed on the buying interest which in turn put pressure on Chinese export offers.