Posted on 25 May 2023
Formosa Ha Tinh Steel (FHS) has lowered its domestic prices by a further $20-40/tonne for its latest hot rolled coil allocations, for June/July shipment, Kallanish notes. Its initial $20/t cut on 17 May was widely regarded by industry sources to be uncompetitive.
The mill is setting lower prices for buyers who take larger tonnages (see table below). Its 17 May price announcement pegged June/July-shipment non-skin-passed SAE 1006 at the equivalent of $620-623/t cif Vietnam.
Vietnamese buyers should be able to accept FHS’s lowered prices, Vietnamese trading sources say. “But with today’s large drop in the Chinese steel futures, I don’t think that it will be able to sell large-tonnage volumes,” a trader in Ho Chi Minh said on Wednesday. He notes that with Hoa Phat due to release its new domestic prices next week, buyers may be aiming to wait for those instead, in the hope that the latter mill’s prices are more competitive compared with FHS.
Some Vietnamese trading sources attribute FHS's price cut to the low-priced offers of recent Japanese SAE 1006 HRC to Vietnam. One offer was heard at $580/t cfr Vietnam on Monday, while two Tier 1 Japanese mills' offers were at $600/t cfr. Buyers are bidding at $590/t cfr against the $600/t offers.
"Demand is low and the Japanese mills need to collect export orders," a Hanoi trader says of these low-priced Japanese quotes. The latest FHS price cut may not be the end. "The Japanese mills may now need to lower their prices if they want to compete with FHS today," a regional trader says. The “bad” end-user metallic coating steel sector in Vietnam is the main reason why HRC prices are sinking. "There is just no demand," he adds.
Formosa Ha Tinh's adjusted non-skin passed SAE1006 HRC cif Vietnam prices | |
Quantity | $/tonne |
Below 500t | 600 |
500-4,999t | 592 |
5,000-9,999t | 589 |
10,000-19,999t | 583 |
Above 20,000t | 580 |
Source:Kallanish
