Posted on 18 May 2023
Formosa Ha Tinh Steel's (FHS) latest domestic prices for its new hot rolled coil allocations for June/July shipment are considered to be uncompetitive, Kallanish notes. Despite cutting domestic prices by $20/t, market participants in Vietnam say that the mill will need to lower prices even further.
The mill announced on 17 May that the June/July-shipment price for non-skin-passed SAE 1006 HRC would be set at the equivalent of $620-623/tonne cif Vietnam down from $642/t cif on 21 April. Its new skin-passed HRC prices are set at $625-628/t cif while SS400/pipe-making grade HRC are tagged at $620-623/t cif.
Reroller and trader sources in Vietnam contacted by Kallanish maintain that these new prices will not fly. “They have to give rebates because nobody would want to buy at this level,” a Hanoi trader says. He notes that unlike before, the export market is also slow so FHS will have to follow the market. It is now a buyer’s market, he adds.
A Ho Chi Minh City trader thinks that this is a “tactic” of the mill. “Although they release a high price, they will reduce prices when negotiating with customers,” the trader says. “They cannot sell at these prices. The bid price for SAE 1006 HRC is only 560-570/t cfr Vietnam,” he says.
Bids were invited for 2-2.75mm thickness SAE 1006 HRC from a certain small Chinese mill at $570/t cfr Vietnam. Offers from other Chinese mills for SAE 1006 HRC are prevailing at $590-600/t cfr Vietnam. Offers for Chinese SS400/Q195 HRC are heard at $550-560/t cfr. Market participants do not hear of import deals transpiring this week.
Source:Kallanish
