During the third week of May 2021, with the strong downtrend of Iron Ore from China, the price of finished steel was significantly affected. HRC and rebar fell for 3 consecutive sessions, while coated steel increased. Price was like chaos when many traders and stockists with position kept plunging price to release stock. This makes people believe that price will fall in the future.
At the same time, EU and US prices continued to increase, even some regions increased sharply. India also showed signs of increasing again. This is the cumulative result of inflation and market demand, which will push prices to a peak before returning to a new equilibrium.
After oil price declined almost 3% due to new agreement between US and Iran about lifting sanctions on Iranian oil, banking and shipping sectors. However, by early this week, oil rises by 2 – 2.5% again buoyed by market expectations that fuel demand globally is rising with the re-opening of major economies in Europe and higher travel numbers in the United States.
From February to May 2021, the average monthly volume of bulk cargo from Vietnam to the EU and the US is over 100,000MT for each region and is expected to hit the peak from June 2021 to September 2021. When demand exceeds supply, whatever should happen will happen. It is predicted that bulk freight rates from July to September 2021 will soar sharply, even beyond expectations of all shippers. And the escalation of container freight also is not an exception due high serious shortage of empty container and huge pressure on vessel space.
Especially, the increase of oil will lead to the increase of almost elements constituting steel price will also increase as an inevitable consequence. The rise of oil will also lead to the rise of transportation fee. Under distinct lack of offers situation, it is not difficult for EU and US buyers to make decision before price goes higher. However, the situation is not easy for Asean buyers when these markets are completely influenced by Chinese price.
By early May’s last week, Vietnamese local price increases sharply again after a period of slowing down due to the influence of China. Mills are planning their next price hike in June. For China, even if their local price keeps slumping under Chinese cabinet’s interference, their export price is still a big question when the government is trying to ease local price but putting effort to apply export tax from 1st June.
If you care about Vietnamese flat and long products, please contact us for further discussion:
Ms. My (Business Development Department)
Phone/Whatsapp: 0084 78 324 3888