Vietnam: Imported HRC offers slump further as deals dry up
Vietnam’s imported HRC market turned mute after booking cheaper cargoes from Russia. Market sentiments remained pessimistic after the deal and buyers were reluctant...
Vietnam's imported HRC market turned mute after booking cheaper cargoes from Russia. Market sentiments remained pessimistic after the deal and buyers were reluctant to book the material from other exporting nations which resulted in a decline in offers.
Imported HRC offers came under pressure due to the following reasons-
1. Chinese mills mute on quoting offers- Most of the Chinese mills turned mute in offering HRCs to the global market because of a slump in demand. However, a few mills were heard to be quoting at $920-930/tonne (t) CFR Vietnam as against $930/t in the last week. Chinese HRC export offers dropped by $10/t w-o-w.
2. Indian HRC offer drops sharply- Limited buying interest in South East Asia weighed on the recent offers. Indian mills are quoting HRCs at a $940-950/t CFR basis, down from $990-1,000/t CFR a couple of days back. Meanwhile, higher realizations in the EU, Gulf, and Turkey kept Indian manufacturers glued to export opportunities in these markets.
3. Russian HRC offers turn lucrative- Around 90,000 t of HRCs (positioned cargo) of Russian origin were booked by Vietnam importers at $850-860/t CFR last week. A few weeks back, the Russian government had announced export duties on all steel products at the rate of 15%, but minimum $54/t, effective from 1 Aug'21 till 31 Dec'21. The base duty rate will be 15%, and in addition, a specific part will be established, which will be calculated as the minimum rate per tonne of products.
4. Monsoon hits South East Asia, demand weakens- Monsoon in the South East Asian region generally results in reduced construction and trade-related activities because of the heavy rainfall and sea storms. Thus, prices may remain under pressure in the short-to-medium term.
5. Buyers waiting for price revision from domestic mills- Vietnamese buyers were silent on bids as they preferred to wait for local-based Formosa Ha Tinh's new price announcements this week. Buyers are expecting that local prices will be cheaper over imported HRCs, hence, they have adopted a wait-and-watch stance.
The market may turn active once the domestic integrated steel mills announce their HRC offers for Aug-Sept'21 deliveries. Also, the Vietnam Steel Association (VSA) during its SEAISI 50th Anniversary celebration e-conference and Exhibition forecast that the country's steel imports may touch 13 million tonnes (mn t) in CY'21, down by 4% against CY'20. Thus, Vietnam's steel industry is slowly shifting towards local supplies.