Vietnam: Imported HRC offers from China fall by $20/t w-o-w

The imported HRC market in Vietnam witnessed a reduction in offers from key exporting nations this week.

• China's HRC (SAE1006) offers are hovering at around $770-780/t CFR Vietnam, down by $10-20/t w-o-w against $790/t CFR a week back.
  
  
• Indian mills are heard quoting around $840/t CFR levels, down by $10/t against $850/t as on 12 May 2022.
  
  
• No firm offers were heard from Russia, South Korea or Japan.
  
  

Slow domestic demand, rising inventory impact China offers
China was witnessing a spike in Covid infections since mid-March 2022, resulting in sluggish downstream demand and increased inventories at mills. For instance, in the first 10 days of May, the steel inventory at key iron and steel enterprises was 18.74 million tonnes (mnt), an increase of 659,800 t, m-o-m, and an increase of 260,400 t over the same 10 days of last month, as per data from the China Iron and Steel Association (CISA). Moreover, slow demand in the regions other than South East Asia is making Chinese mills to aggressively explore the market to conclude deals.

Indian mills shift to Vietnam market on slow demand in EU, ME
Dried demand from the Middle East and Europe, where Indian mills were actively exporting during the Russia-Ukraine war crisis at higher realisations, have resulted in a shift in focus of mills to South East Asian region. Earlier, mills were not actively offering to Vietnam amidst low realisations. Notably mills have resumed offering in the market in the middle of the preceding week.

Outlook
The buyers in Vietnam are waiting for the price announcement by the domestic mills in the upcoming few days, which shall continue to weigh on both demand and prices of the imported HRC in the market.