Posted on 03 Jan 2024
Vietnam's Hoa Phat Dung Quat has sharply raised the list prices for its domestic hot rolled coil sales, Kallanish notes. The steel producer raised prices by around $40/t from last month. Soaring iron ore prices are behind the recent price increase. The company's quotes for non-skin passed SAE1006 or SS400 grade HRC due for delivery in March and April have been set at the equivalent of around $640/tonne cfr southern Vietnam, excluding VAT. In VND terms, the latest price of VND 15,630/kg is VND 950/kg higher.
Prices may be $5-10/t higher than the domestic market expects, a source close to Hoa Phat says. He attributes the increase in raw materials prices as the main driver behind the HRC price rise as these are “increasing higher than steel.”
“Chinese HRC prices continue to go up. Iron ore prices are too high now and they are influencing product prices,” a Ho Chi Minh City trader says.
Other Vietnamese market sources deem Hoa Phat’s latest prices as $10-20/t higher than price acceptance level. “It will be difficult to sell,” a reroller in southern Vietnam says. He thinks that a reasonable price would be $620-625/t cfr or $630/t cfr at the maximum. Two traders also considered $620-625/t cfr to be where buyers will pay.
“The price of iron ore is highest in the last 18 months and could keep increasing in the next period of time,” a Hanoi industry source says. At the same time, prices of downstream products such as galvanized steel and pipes are rising so there is support for Hoa Phat. He thinks that the other Vietnamese HRC producer, Formosa Ha Tinh Steel (FHS) may also raise its prices.
Hoa Phat’s prices are “so high,” another trader in Ho Chi Minh City says. FHS set its prices in mid-December for its non-skin passed SAE 1006 HRC for January/February shipment at around $625-637/t cif Vietnam. Hoa Phat’s HRC prices are usually $10-15/t lower because “FHS quality is different” he notes.
Source:Kallanish
