Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Vietnamese steelmaker Formosa Ha Tinh Steel (FHS) increased domestic HRC prices by $40-45/mt for October deliveries. The company raised offers amid an increase of import quotas by the Vietnamese government in early August. Steelmakers are uncertain on Chinese demand and market sentiments are mixed. Formosa might adjust prices depending on demand, said market participants. 


Formosa Steel raised HRC prices by $40-45/mt for October deliveries from the prior month with the latest offers for rerolling Skin-pass SAE1006 HRC at $547-552/mt cif. Prices for the grade rose by around $100/mt compared to $455-465/mt cif for August shipments in two months. The steelmaker also raised the prices for SS400 and pipe making-grade and other higher-grade flat products SPHT3, S235JR, SG255 and SS490 by the same margins. 


The domestic sales prices in Vietnam are subjected to marginal negotiations and the steelmaker is not sure if the fresh offers will be readily accepted by the market as volatile iron ore import prices and declining Chinese imports could suppress demand. 


High domestic demand 

Vietnam has increased its steel import quotes in late-August and early September. On the other hand, robust steel production was supported by strong domestic demand as well as significant export sales, despite the pandemic. Recovery in the auto sector is boosting demand for flat steel in South Asian markets.


Mills in Vietnam have booked a significant volume of HRC from India at $545/mt cfr China. There were numerous trades reported for HRC from Chinese, Russian and Taiwanese mills at $525-550/mt cfr China and SE Asian buyer, driven mainly by auto sector demand. 


Chinese appetite fades

Chinese domestic HRC prices rose by around 25pc or over $120-130/mt in the April-Sep period, while domestic rebar prices rose 10pc over the same period. However, since the start of September, margins of China’s domestic steelmakers have slumped sharply due to high iron ore prices and lower finished steel prices, post bullish third quarter. 



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