Vietnam: Imported HRC offers rise w-o-w amid increase in domestic prices

Imported hot-rolled coil (HRC) offers from China to Vietnam rose w-o-w as anticipation of further price rises and demand appears to be influencing Chinese suppliers to adjust their offers proactively. In addition, following the Hoa Phat's price increase, another Vietnamese steel major, Formosa Ha Tinh Steel (FHS) has increased HRC prices for late-March to early-April 2024 sales, informed sources.

Moreover, Indian mills have kept prices range-bound w-o-w. Notably, mills have recently resumed HRC export offers to Vietnam, which remained suspended since July 2023.

• Chinese HRC (SAE1006) offers were heard at $615-620/t CFR, up $10/t w-o-w from $605-610/t CFR. Meanwhile, offers for HRC SS400 were around $593-595/t CFR.
  
  
• Indian HRC (SAE1006) offers remained range-bound w-o-w to $630-$635/t CFR Ho Chi Minh City, Vietnam.
  
  

Chinese HRC futures decline w-o-w: Chinese HRC futures showed downward trend this week. Settled prices of SHFE HRC futures (May 2024 contracts) went down by RMB 42/t ($6/t) w-o-w to RMB 4,020/t ($563/t) against RMB 4,062/t ($569/t) a week ago. Moreover, d-o-d, futures inched down by RMB 20/t ($3/t) on 15 January 2024 against RMB 4,040/t ($565/t) on 12 January 2024. HRC futures showed decline due to seasonally weaking demand and upcoming Lunar new year holidays in China in February 2024.

FHS raise monthly HRC prices m-o-m: Formosa Ha Tinh (FHS), has raised HRC prices by $27-35/t m-o-m for late-March to early-April 2024 shipments, as per the quantity booked. Subsequent to the revision, prices of HRC (SAE1006, skin pass) stood at $652-670/t CIF Ho Chi Minh City. Meanwhile, non-skin pass coils were assessed at around $647-665/t CIF. A confluence of factors, including rising raw material costs, increased competition, and a surge in offers for Chinese imported HRC, have compelled the company to raise its prices.

Outlook:

Despite a recent decline in Chinese steel futures, the Vietnamese HRC market is projected to maintain its upward trend in the short term. This optimism is fuelled by growing activity in the construction and manufacturing sectors, alongside recent price increases announced by major producers like Formosa Ha Tinh and Hoa Phat.