Vietnam: Imported HRC offers from China remain stable w-o-w; market mute

Imported Chinese-origin hot-rolled coil (HRC) offers into Vietnam remained stable w-o-w at $570-575/tonne (t) CFR amid muted demand. However, traders kept their prices unchanged w-o-w amid volatility in Chinese steel futures.

Current week's imported HRC offers:

• Chinese HRCs (SAE1006) were heard at $570-575/t CFR, unchanged w-o-w. Offers for the SS400 grade of HRCs stood at around $560/t CFR.
  
  
• Japanese HRCs (SAE1006) were heard at 600/t CFR.
  
  
• Indian mills have not been offering in the Vietnamese market for a while.
  
  
  
• Meanwhile, no offers were heard from South Korea and Russia this week.
  
  
  

Volatile Chinese SHFE HRC futures: Chinese SHFE HRC futures (October contract) fell by RMB 37/t ($5/t) w-o-w to RMB 3,684/t ($524/t) against RMB 3,721/t ($529/t) a week ago. However, the first two to three days of last week saw an increase but prices went down on the last day of that week. Thus, mills have kept HRC offers stable amid volatility in Chinese steel futures.

Formosa reduces monthly HRC prices for July: Vietnam's leading steel mill, Formosa Ha Tinh (FHS), has announced a cut in its monthly HRC (SAE1006, skin pass) prices by $65/t for June deliveries, sources informed SteelMint. Post-revision, the effective price stands at $625-628/t CIF Ho Chi Minh while HRC (non-skin passed) prices are at $620-623/t CFR. The company has lowered prices considering subdued domestic demand and declining HRC import offers.

Subdued global demand: Prices in the overseas markets have declined significantly due to subdued demand. For instance, China's Shagang Steel has reduced rebar prices by RMB 50/t ($7/t) to RMB 3,950/t ($563/t) for late-May sales. Prices are ex-mill, including VAT. In addition, Japan's top electric arc furnace steelmaker, Tokyo Steel, has rolled over its HRC prices to JPY 115,000/t ($833/t) m-o-m for June 2023 sales.

Outlook:
Vietnamese buyers are not accepting Formosa Ha Tinh's (FHS's) new prices and are expecting rebates from the company. Moreover, they are also expecting lower import offers from China, amid an unclear direction in SHFE HRC prices.