Posted on 09 May 2023
The Vietnamese hot rolled coil market remains weak with little indication that there will be a recovery anytime soon. Domestic mill Hoa Phat has announced a $70/tonne cut in its monthly domestic price for new domestic allocations of HRC, Kallanish notes. Some regard the price cut as insufficient in view of the plunge in Chinese offers.
Its non-skin passed SAE1006 or SS400 grade HRC has been set at the equivalent of VND 14,360/kg (around $610/t) cfr Ho Chi Minh City (HCMC), down from VND 16,030/kg last month. The company’s HRC prices to northern and central Vietnam are currently each listed at VND 14,330/kg. These prices are for June/July shipments and exclude VAT.
Despite the sharp price drop, several traders in Vietnam think the Vietnamese mill will face difficulties competing with imported Chinese material. “I think it [domestic mill’s price] is unworkable when their main HRC specifications are SAE1006 and SS400 grades,” a Hanoi trader says. She points out that Q195 grade HRC from China, which some may use as a cheaper substitute for SS400 HRC, is being offered at $550-560/t cfr, while local stockists are selling domestically at around $545-550/t.
There are still traders shorting the market. They are offering Q195 HRC at $540/t cfr for 3mm thickness, $555/t cfr for 2.75mm thickness and $560/t for 2.5mm thickness. For 3-12mm thickness base SS400/Q235 grade, traders’ price idea is at around $565/t. These quotes are cfr Ho Chi Minh/Haiphong and for shipment by 30 June.
Offers for SAE 1006 grade HRC were scarce on Thursday and Friday. “The market is too weak. Regional countries were on holiday so the market was not active,” a Vietnamese trader says. There are no firm offers for SAE 1006 HRC, a Chinese trader observes. But he believes that price indications are at $580-585/t cfr. Another trader however says larger Chinese mills' SAE 1006 HRC prices are higher, at $590/t fob or $600/t cfr Vietnam.
“Hoa Phat’s prices are too high and it should lower its prices to $580-585/t cfr,” a HCMC trader says. He says this is the current level for Chinese SAE 1006 HRC. Buyers will not pay high levels because they know the market is trending downwards. Kallanish assessed imported SAE grade 2-2.7mm thickness HRC at $580-590/t cfr Vietnam, down $20 from the previous Friday.
Source:Kallanish
