Vietnam: Imported HRC offers rise by $10/t w-o-w

Imported HRC offers for Vietnam from China increased by about $10/t this week following the price increase announcement by Formosa Ha Tinh. However, buying interest for imported HRC remains slow in the market, sources hinted.

Current offers:

• China: HRC (SAE2006) was heard offered at $660-670/t, up from last week's $660-665/t CFR. While offers for HRC (SS400) were heard at around $650-660/t CFR.
  
  
• India: Indian mills are still hesitant to offer in the market amid lower realisations compared with markets in the Middle East and Europe.
  
  
• Japan:Offers from Japan hovered around $720-725/t CFR, up from last week's $700/t CFR.
  
  
• No offers from South Korea or Russia were heard this week.
  
  

Formosa hikes prices more than expected: Steel major Formosa Ha Tinh has increased HRC (SAE1006, skinpass) prices by $59/t m-o-m to $699/t CIF Ho Chi Minh City (HCMC) for April and early May 2023 sales last week. However, market participants had anticipated it to be around $685/t CIF.

This has kept buying interest low in the market. Meanwhile, Vietnamese buyers are awaiting price announcement by Hoa Phat, which is expected in the next few days.

Europe demand yet to rebound strongly: The European market is a major export destination for Vietnam. Buying interest in the market is slow at the moment as the absorption of the recent price hike by domestic mills has been difficult there. "European buyers moved to the sidelines in the last couple of weeks after having booked good volumes since early January," a source said.

Moreover, it is still to be seen how the European market adjusts for the loss of volumes from Turkiye.

Near-term outlook:
Imported HRC offers to Vietnam are likely to rise in the near term amid firm global HRC prices and the rally in HRC futures. Chinese HRC (May 2023 contract) futures on SHFE rallied throughout last week rising by RMB 126/t ($19/t) w-o-w and settling at RMB 4,248/t ($619/t) on 20 February. Chinese steel behemoth, Baosteel, increased HRC prices by about RMB 200/t ($29/t) for March sales early last week.