Posted on 25 Jul 2019
The Vietnamese hot rolled coil market continues to drift with bids lagging behind offers, Kallanish notes. Buyers currently lack interest to book new cargoes because they are full and Indian material is readily available.
Offers for Indian-origin SAE 1006 2mm and up thickness HRC for August shipment are prevailing at $515-520/tonne cfr Vietnam but these are not attracting buying interest, traders say.
A Tier 1 Chinese mill's offer for 2mm base thickness SAE 1006 HRC is at $525/t cfr. An offer for 2mm base SAE 1006 HRC from Brazil, meanwhile, is at this same level. While both offers are for September shipment, the one from Brazil would involve a much longer voyage time, with expected arrival at end-October. This would incur more risk in today’s bearish market, a trader says.
Last week, deals for Indian SAE 1006 HRC took place at around $510-512/t cfr Vietnam. The Indian domestic HRC market is currently not performing well, an Indian trader says. As Indian mills are less affected by the iron ore rally, they may have more scope to reduce prices, he notes. But their domestic sales will get better when the monsoon season in India ends in August, he adds.
Domestic Vietnamese producer Formosa Ha Tinh has privately conceded to a $5-10/t discount off its price hike of $25/t for its September shipments for HRC, certain Vietnamese trading sources say. Last week, the producer’s announced base price for its SAE 1006 HRC was $541/t cif Vietnam. The underlying reason for the weak HRC market is due to sluggish demand for downstream steel, market sources say (see separate report).
Vietnam’s domestic mills are offering hot-dipped galvanized steel at VND 16,500-17,100/kg ($708-733/t) for Z80 coil, inclusive of 10% VAT. This is VND 100/kg ($4/t) higher than in early June. In Manila, Chinese hot-dipped Z80 is currently priced at $610/t cfr Manila, up $35 from early June.
