Vietnam: Lockdown, SE Asia holidays keep imported HRC market silent

Imported HRC offers to Vietnam continue to remain unchanged from major exporting countries this week. However, with China witnessing national holidays, offers from the country remained absent today. Extension of the lockdown in Ho Chi Minh City (HCMC) until end-Sept'21 continues to impact market activities, while a few exporting countries are observing holidays.

SteelMint had reported that a major Indian mill had concluded a 60,000-65,000 t HRC export deal to Vietnam last weekend, which was finalised at $890/t on CFR basis for Oct'21 shipment. The conclusion of the deal coincides with the phased re-opening of the steel hub of Ho Chi Minh City.

Offers from major exporting nations

1. Indian mills continued offering at $890-900/t CFR basis.
2. Russian offers remain unchanged at $870-890/t CFR basis.
3. No firm offers were heard from Chinese, Japanese and Korean mills today.

What factors are impacting the imported HRC market?

a) Vietnam's domestic mills reduced prices for Oct-Nov'21 delivery: Domestic manufacturers Formosa and Hoa Phat announced a reduction in their offers earlier this month, narrowing the gap with imported HRC offers.
Revised offers from Formosa now stand at around $925-930/t CIF Vietnam, while those from Hoa Phat are at $900/t CIF basis. Also, the buyers are more focused on domestic procurement rather than imported HRC, as per reliable market sources.

b) Holidays being observed in major exporting nations: A few major exporting nations are observing holidays beginning this week. This has kept the market somewhat muted in Vietnam as well. China is observing the "Mid-Autumn Festival" whereas Japan is observing "Respect for the Aged Day" and South Korea is on its "Chuseok" or Korean thank-giving holidays.

c) Covid-19 cases still hinder trade activities, lockdown extended: Vietnam registered about 10,040 new cases on 19 Sept'21, as per data from the Ministry of Health. Although infections have come down from the peak of 13,197 new cases on 2 Sept'21, the government has extended the lockdown from 15 Sept'21 till end-Sept'21.
"The People's Committee of HCMC has already cleared its intent on a phased reopening, while the central government has asked a plan to be formulated for other regions by 21 Sept'21 regarding the gradual opening up of activities," SteelMint learned from a few Vietnamese sources.