Vietnam: Formosa cuts HRC list prices by $40/t for Jan'23 sales

Vietnam's steel major, Formosa Ha Tinh (FHS), today reduced hot-rolled coil (HRC) prices by $38/t m-o-m for January and early-February 2023 sales.

Post-revision, FHS's offer price for HRC (SAE1006, skinpassed) stands at $555/t CIF Ho Chi Minh City (HCMC) compared with $593/t CIF announced for December and early-January sales a month ago. The revised offers for non-skinpassed and pipe-making grade stands at $550/t CIF.

Factors behind drop in offers

1. Fall in imported HRC prices: Chinese mills were heard offering HRC (SAE1006) at around $545-550/t CFR, down $30/t m-o-m. Indian mills continue to remain hamstrung by the 15% export duty on non-alloyed flat steel products since end-May. Meanwhile, Indian mills have shifted focus to the domestic market due to higher realisations.

2. Subdued domestic demand: Integrated steel producer Hoa Phat is mulling suspension of operations of two BFs in the Dung Quat complex and two others in the Hai Duong region this month. There is also the likelihood of suspension of another BF in the Dung Quat region in December. Moreover, Formosa was also heard to have cut production by 15% in the first stage, as per local media reports.

3. Steel exports continue to fall: Vietnam's total steel export volumes fell by 36% to 6.35 mnt in January-October this year compared to 9.88 mnt in the year-ago period.