Asian hot-rolled coil (HRC) prices have firmed up lately following continued bullish demand from China. However, Davis Index’s analysis revealed that lingering bilateral trade tensions between India and China has pushed the latter into looking for Southeast Asian exporters like Vietnam and Taiwan. Chinese buyers had aggressively booked large tonnages for August shipments from Indian suppliers who were targeting exports on subdued domestic demand.
However, a recent bulk deal heard between Vietnamese leading supplier and Chinese buyer opened a new trade route. Traditionally, Vietnam has been an importer of Chinese HRC. Low freight and transit period compared to India are additional factors supporting these deals.
Vietnam’s steelmakers have reportedly booked 100,000mt of bulk SAE 1006 HRC contract at $470-475/mt cfr China. However, confirmation on this deal was awaited.
Steelmaker Formosa Ta Hinh increased its monthly sales prices by $15-20/mt for September shipments late last week. The steelmaker’s latest offers for September HRC are Skin-pass SAE1006 HRC at $468/mt cif compared to $455-465/mt cif for August shipments which was announced last month.
The steelmaker usually allocates around 350,000mt HRC for its monthly sales including domestic and exports markets. The steelmaker prefers selling in domestic market but exports it depending on the price countered. It is targeting at least $475/mt cfr China and is in no hurry to sell materials to fetch better prices in the coming days.
Chinese HRC imports are subjected to 3pc duty from India while Vitnamese imports are exempted.