Vietnamese imported HRC market remains slow as domestic mill offers discounts

• Domestic mill negotiate one-to-one, offering discounts
  
  
• Preference remains high for domestically produced HRC
  
  
• Chinese offers decline by up to $15/t
  
  

Imported HRC offers in Vietnam continued to remain weighed down by higher buying preference for domestic material. Domestic steel major Formosa Ha Tinh (FHS) was heard offering discounts in the range of $30-50/t to select buyers, SteelMint learnt from sources.

Domestic producer offers discount to entice buyers
Formosa Ha Tinh (FHS), witnessing slow growth in domestic trade activities, was heard offering discount @ $30-50/t over the announced price of $855/t CIF Ho Chi Minh City (HCMC) for July and early-August sales. "The mill is driving negotiations one-on-one and offering discounts to select buyers. Nothing new, as this has been practiced before during slow sales periods," informed a reliable Vietnam-based source. Hoa Phat had announced its price for HRCs at $793/t CIF HCMC for July and early-August deliveries.

Chinese HRC offers drop further
The flip-side impact of easing of Covid-19 lockdown restrictions in China was visible in the Vietnamese market. While domestic prices showed signs of improvement, the export offers from Chinese mills treaded lower. Stimulus measures to increase consumption in China and the lockdown easing led to increase in production which will likely weigh on the offers, SteelMint understands from the Vietnamese sources. The current week's offers for HRCs (SAE1006) were heard at around $760-770/t CFR Vietnam, lower from the previous week's offers of $770-780/t CFR.

Moreover, for HRCs (SS400), offers were heard in the range of $745-755/t CFR.

Limited competition in market
The Vietnamese market hardly saw any competition against the backdrop of preference for domestic material, inconsistent offers from Japanese mills and muted response from the South Koreans due to lower sales realisations.

Furthermore, Indian mills which had returned to the Vietnamese market with an offer of around $850/t CFR in early May, withdrew after the government announced an export duty @15%, on 21 May, 2022, on clad, plated or coated flat rolled products of iron or non-alloy steel of 600mm in width or more (including HRCs).

Near-term outlook
A few exporting countries might take advantage of the absence of Indian-origin HRCs in the market and try to increase their offers. However, this is a gamble amidst discounts being offered by domestic mills and buyers glued to domestic sourcing.