Vietnam: Imported HRC offers from China rise w-o-w

Imported offers of China-origin hot-rolled coil (HRC SAE1006) into Vietnam rose by $10-15/tonne (t) w-o-w this week. Prices rose amid sharp increase in China's steel futures on the Shanghai Futures Exchange (SHFE) for October 2023 delivery. Moreover, Vietnamese buyers are currently observing the market.

Imported HRC offers-

• Chinese HRC (SAE1006) offers were heard at $590-600/t CFR against $585-590/t CFR last week. Meanwhile, offers for HRCs (SS400) were at around $575-580/t CFR.
  
  
• No new offers were heard from Japan. However, last heard offers were at around $610-620/t CFR.
  
  
• No offers were heard from India, Taiwan, South Korea and Russia this week.
  
  

Vietnamese buyers cautious on rising prices: Market participants in Vietnam are currently in a wait-and-watch mode, and no firm deals were heard last week amid slow activity, informed a reliable source. However, market activity could recover slightly if prices continue to rise. Two steel majors in Vietnam have already exhausted their HRC allocations until September 2023, which does indicate that demand is looking up.

China's steel market on upswing amid Politburo meeting: Chinese steel mills further increased their export offers to Vietnam as well as domestic prices against the backdrop of the Chinese Communist Party Politburo meeting on 24 July, 2023. The meeting emphasised the improvement in steel demand, which is expected to benefit real estate, automotive and infrastructure & construction. In addition, the government's instruction to reduce production and not exceed last year's level has contributed to improved Chinese HRC offers.

Outlook

Chinese SHFE HRC futures (October contract) rose sharply by RMB 158/t ($22/t) w-o-w to RMB 4,090/t ($572/t) today as against RMB 3,932/t ($550/t) last week. This, in turn, has resulted in positive market sentiments. However, participants are awaiting Hoa Phat's new price announcement, post-which, it will be interesting to see which way the market goes.