Posted on 29 Jun 2023
Although Vietnam's power crunch caused by high temperatures and severe droughts has eased a bit lately, its impact on the country's steel market remained, with downstream demand dampened and steel producers turning eyes to overseas buyers, local importers informed Mysteel.
Vietnam has been suffering from high temperatures and water shortages since early May, especially in its northern regions, which brought critical pinch in the country's power supply and disrupted manufacturers in various sectors, Mysteel Global noted.
Under such circumstance, Vietnam saw its downstream steel demand for both domestic and foreign cargoes depressed, local importers pointed out, adding that the country's steel imports for May-June shipments have mounted at ports currently and its inventories of steel plates have also reached a relatively high level.
Steel buyers in the country thus reduced their purchases in the overseas market. For example, few import orders for China-origin hot coils were concluded last week, as Mysteel Global reported.
For their part, leading Vietnamese steel producers paid more attention to seek export opportunities. North Vietnam's Hanoi-based Hoa Phat Group (HPG), the largest steelmaking group in the country, last week raised its offering price of SAE1006 hot coils for September shipment by $50/tonne on month to $590/t FOB after July and August shipments had been fully booked.
But overseas buyers, those from Europe in particular, took a wait-and-see stance on HPG's lifted price, with few deals being made, market sources added.
Earlier on June 22, the state-owned Electricity Vietnam Corporation (EVN) announced that the power supply would basically meet demand in the northern regions from June 23 thanks to the increasing water level at hydropower plants' reservoirs.
But the EVN also warned that extreme situations may still occur in the future as the power supply system in the regions has no backup capacity, Mysteel Global learned.
Source:Mysteel Global
