VIETNAM HRC IMPORT MARKET STALLS ON OFFER PRICE SURGE

VIETNAM HRC IMPORT MARKET STALLS ON OFFER PRICE SURGE

Importers of re-rolling grade hot rolled coil in Vietnam are standing their ground against higher offers after those from China spiked this past week on limited supply and the strength of its domestic market.

Market participants indicate that Chinese offers – which rose to 600-620 USD per tons CFR on September 4 from 560-570 USD per tons CFR three days prior – are showing little signs of retreating. Vietnamese buyers retreated to the sidelines after being spooked by the sudden surge.

HRC import prices in Southeast Asia – which mainly considers Chinese 2-3mm SAE1006 HRC and equivalent grades sold into Vietnam – was 585-600 USD per tons CFR for the week ended Monday September 11, up from 560-570 USD per tons a week earlier. The increase reflects the higher offers from China.

“Usually buyers hold back if the market changes too quickly. It is also seasonally weak in Vietnam and Thailand right now because it is the rainy season but there is usually a demand uptick in October,” one trader said.

Bids were few and far between last week with only one heard at 585 USD per tons CFR. Trader sources said major importers were still hanging on to a price idea of 575-580 USD per tons CFR, a price level that Chinese suppliers are not willing to accept.

 

“Importers are playing with time. They think that traders have position cargoes available and that they will come out to offer in the market at lower prices than current offers. Depending on trader offers, I think buyers can commit to a booking anytime,” a Vietnam-based trader said.

While there are no transactions for direct cargoes from mills, sources indicate that a position cargo of re-rolling-grade HRC was traded at 590 USD per tons CFR Vietnam on September 12.

Healthy domestic demand in China and tighter supply resulting from the shuttering of induction furnaces are providing strong support to flat steel prices in the country. With Vietnam being in the off-season this month, there is not much urgency for buyers to immediately meet seller price expectations this week.

“Last week, sellers were just testing the market and they are realizing after talking to people that offer prices are too high. Maybe at 590 USD [per tons] CFR buyers will start looking. Otherwise, they wouldn’t even want to begin talks,” a second Vietnam-based trader said.

Sources believe Vietnamese buyers are likely to return to the negotiation table soon. Trading is expected to occur in the last week of September just before China enters a week-long holiday during the first week of October to mark its National Day and the Mid-Autumn Festival.