An alarming plunge in the Chinese steel market on Friday has caused Vietnamese hot rolled coil to sink to new recent lows, Kallanish notes. The commercial-grade HRC import market in Vietnam sunk by around 10% at the end of last week.

Short-selling traders are offering Chinese-origin 3-12mm thickness HRC at as low as $560/tonne cfr Vietnam, Vietnamese trading sources say. However, most Chinese traders said they see offers on Friday at $570-580/t cfr Vietnam. Nevertheless, this is still a steep drop from similar offers at $620-630/t cfr Vietnam at the start of the week.

The domestic market in Vietnam is very weak, with inventories high, and this has caused domestic prices to falter, Vietnamese market sources say. Prices are around the same as new Chinese offers at around $560-570/t cfr, a Ho Chi Minh City-based trader says. “With big quantities, I think that buyers can get lower prices,” he adds.

The Chinese market is weak because demand is very thin but mills have not cut production, a Chinese trader says. He thinks that Chinese SS400 HRC prices could possibly touch $500/t cfr Vietnam. He has heard of an offer for a position cargo for Chinese SAE 1006 2mm and up thickness HRC at $605/t cfr Vietnam. Chinese traders were offering Chinese SAE 1006 HRC at $600/t cfr Vietnam, another Vietnamese trader said on Friday. Indian SAE 1006 HRC offers were meanwhile heard on Thursday at $610/t cfr Vietnam.

Kallanish lowered SAE 2-2.7mm thickness HRC on 15 July to $600/t cfr Vietnam, down $60 on-week. Import prices last slipped to such low levels towards the end of 2020 before rising above $600 in December 2020. Kallanish previously assessed SAE 1006 HRC at $595-600/t cfr on 27 November 2020.

In the Philippines, offers for 3-12mm thickness maximum 15-tonne small HRC are currently at $590-600/t cfr. There is usually a $20/t extra for such small coils, a Manila trader says. “No one is buying,” he adds. Many cargoes ordered previously are arriving now. "These were booked at least $100/t higher," he explains.