Vietnam’s leading steelmaker Formosa Ha Tinh steel has decided to cancel its monthly price announcement for June delivery steel shipments, as per Davis Index sources. The company could offer shipments through individual negotiation amid strong competition in Southeast Asia and Chinese markets.
Earlier, Formosa Ha Tinh steel has scaled down production and delayed the announcement of June shipments offers. Market participants believed that the company planned to take advantage of short term recovery in finished steel prices in a few spot markets supported by higher raw material costs, but defered to annouce regular monthly shipment prices.
Formosa steel, one of the leading blast furnace HRC makers followed the footsteps of Hoa Phat group’s steel mill in Dung Quat in Vietnam. It supplies over 400,000mt of HRC and other flat steel products monthly in export and domestic markets.
Weakened domestic steel demand
Domestic steel demand in Vietnam was strong until the COVID-19 outbreak forced downstream industries to shut from early April. Presently, finished steel demand both in domestic and global markets remains subdued and the outlook at least a quarter seems bleak.
In monsoon months from May-October, Vietnam’s finished steel demand usually shrinks as construction activities slow down.
Rising steel imports from India and Russia
With limited offers from Vietnamese mills in the wake of production cuts, steel exporters from India and Russia are aggressively offering finished steel shipments at lowered prices, mainly to liquidate their piled up inventories.
Last week, Indian steel mills sold HRC in bulk volumes at $395-405/mt cfr Vietnam for June shipments. Chinese HRC offers moved up in the range $410-415/mt cfr Vietnam.