Vietnamese HRC market falls to 2020 low

An alarming downturn in the Chinese steel market on Friday sent Vietnamese hot rolled coil to a new low. At the end of last week, Vietnam's hot-rolled steel import market fell by about 10%.

Short-selling traders are offering Chinese-made 3-12mm HRC for as little as $560/tonne in Vietnam, Vietnam trade sources say. However, most Chinese traders said they see offers on Friday at $570-580/t cfr Vietnam. However, this is still a sharp drop from similar offers at $620-630/t cfr Vietnam earlier in the week.

According to Vietnamese market sources, the domestic market in Vietnam is very weak, stocks are high, and this has led to a fall in domestic prices. Prices are about the same as new Chinese offerings, around $560-570/t cfr, says a trader from Ho Chi Minh City. “I think with larger quantities, buyers can get lower prices,” he adds.

The Chinese market is weak because demand is very low, but factories are not cutting production, a Chinese trader says. He believes Chinese prices for SS400 hot-rolled steel could reach $500/t cfr Vietnam. He had heard of an offer for positional cargo for China's HRC SAE 1006 2mm thick and above at $605/t in Vietnam. Chinese traders offered Chinese SAE 1006 HRC steel at $600/t cfr Vietnam, another Vietnamese trader said on Friday. Meanwhile, Indian proposals for HRC SAE 1006 were heard Thursday at $610/t in Vietnam.

The 2-2.7mm SAE HRC dropped to $600/ton in Vietnam on July 15, down $60 from a week. The last time import prices fell to such a low level was towards the end of 2020 and then topped $600 in December 2020. Callanish previously priced the SAE 1006 HRC at $595-600 per tonne franc on November 27, 2020.

In the Philippines, offers for hot-rolled products with a thickness of 3-12 mm and a maximum weight of 15 tons are currently $590-600 per tonne of francs. Such small rolls are typically charged an additional $20 per ton, according to a trader in Manila. “No one is buying,” he adds. Many shipments ordered earlier are arriving now. “They were ordered at least $100 a ton higher,” he explains.