Vietnam: Slow demand drags down imported HRC offers further

As the Vietnamese imported HRC market turns slow, pressure has been piling on offers from the major exporting countries. Slow demand for a prolonged period has also dented domestic sales volumes of the major domestic HRC producers.

Following the lead of Formosa Ha Tinh, Hoa Phat has reduced HRC prices for September and early-October sales towards the previous weekend. Hoa Phat's price for non-skinpassed HRC (SAE1006) now stands at VND 14,400,000/t ($615/t) CIF Ho Chi Minh City (HCMC).

Meanwhile, Formosa has been offering skinpassed HRC at $655/t CIF HCMC for Septermber and early-October sales.

Imported HRC offers drop from India and China:
Offers from India and China have dropped to the levels last seen in November, 2021, relaying low interest for imported HRC even at sharply reduced prices. This week, the offers have reduced further.

Current HRC (SAE1006) offers from major exporting countries:

• China: $570-580/t CFR from tier II mills, down $30-40/t w-o-w. Last week it was around $600-610/t CFR.
  
  
• India: $590-600/t CFR, down $20-30/t w-o-w. Previous week offer was around $610-620/t CFR assessed.
  
  
• No firm offers heard from Japan or South Korea this week.
  
  
• China: HRC (SS400) offer has been heard at $550/t CFR Vietnam.
  
  

On a monthly average basis, offers from China have dropped to around $638/t CFR in the three weeks of July, compared with June's  $724/t CFR. Moreover, offers from India have droped to $647/t CFR for a similar period in July in comparision with $725/t CFR in June.

Buyers content with domestic supplies: Vietnamese buyers are largely content with the domestic purchases. "Buying interest is low at present and the requirements are met domestically without the hassles involved in overseas trades," shared a Vietnam-based source. Sporadic import deals have been heard in the past couple of months, but volumes are quite low. Also, issues around exporting value-added products due to the ongoing global disruption have dented the demand for HRC, he added.

Near-term outlook
The slow demand base in the country, with interest still focused on domestic supplies, is likely to keep import volumes of HRC in check. Moreover, buyers are concerned about volatility in global HRC prices. These factors will keep offers under pressure from major exporting countries like India and China in the near term.