The Vietnamese hot rolled coil import market has reopened this week with much-anticipated price hikes from overseas suppliers. Chinese HRC offers are now competitive, Kallanish notes.
Although Chinese suppliers have hiked export offers, their quotes are lagging behind other Asian HRC mills who have achieved much higher export prices in tight overseas markets.
Offers for 2mm and up thickness SAE 1006 HRC from China are prevailing at $840-850/tonne cfr Vietnam, depending on supplier. But uptake is slow in Vietnam. “Most buyers are keeping quiet,” a Chinese trader says, although he is speaking to customers again. “It [Chinese material] is the cheapest, but customers still cannot follow such increases,” observes a trader in Ho Chi Minh City.
Indian SAE 1006 HRC offers were heard at $860-865/t cfr Vietnam on 7 February. However, Indian mills are targeting to export at even higher levels of $890/t cfr Vietnam, regional trading sources say.
The spike in HRC prices has been mainly due to global restocking and firming raw materials. “Turkey and the EU absorbed higher prices so quickly,” a Vietnamese trader notes. A regional trader adds: “While the Chinese New Year bump was expected, the market has gone crazy.” Japanese and South Korean tier 1 mills are indicating export prices at $900-920/t cfr Southeast Asia.
“Perhaps the bigger re-rollers will start considering import cargoes, but the smaller buyers will wait for another week or so,” the Vietnamese trader says. But he and other market participants say that Vietnamese buyers are unlikely to accept the hiked offer prices because they will prefer to wait for domestic mills Formosa Ha Tinh and Hoa Phat to release their new offers. This could happen at the end of this week or up to mid-February, depending on the pricing strategies of the mills.
According to market chatter in Vietnam, Formosa and Hoa Phat will raise domestic HRC for April shipments to around $820-840/t cfr Ho Chi Minh City. Indian trading sources say they expect the Vietnamese mills’ new prices could be $840-850/t cfr. Last month, Formosa and Hoa Phat set their HRC prices at around $755/t cfr and $735/t cfr Ho Chi Minh respectively.