Four key reasons why Asian steel hot-rolled coil prices remain stagnant - Fastmarkets

Nov 08, 2024

Poor demand from end users for imported hot-rolled coil (HRC) was due to high inventories of HRC substrate and poor galvanized (GI) coil exports to Europe and the United Kingdom.

“There’s at least a $30 per tonne bid-offer gap between international buyers and Vietnamese offers for GI,” a trader source in Vietnam told Fastmarkets. “European buyers can buy from cheaper sources, actually.”

Market sources said Vietnamese galvanizers had also previously purchased large quantities of HRC at high prices and were not willing to sell any downstream coated materials cheaply.

Market participants were also waiting for new offers from domestic steel producer Hoa Phat Steel, which then released its latest offer on Friday for January/February shipment and delivery materials.

It is offering SAE1006/SS400 grade HRC at 13,560 Vietnamese Dong per kg ($535.95 per tonne) to northern and central Vietnam and at 13,590 Vietnamese Dong per kg to southern Vietnam.

These prices do not include value-added tax and are valid until November 6, 3pm.

Domestic steel producers are heard to be still having some excess volumes to sell because of poor export demand for HRC substrate, particularly with India looking to impose anti-dumping duties on Vietnamese flat steel.

“Domestic sales were good last month, but still, the loss of export markets has caused a buildup in domestic HRC inventories,” another trader source in Vietnam told Fastmarkets.

In the import market, offers for Chinese SAE1006-grade HRC were heard at $515 per tonne CFR and $520-525 per tonne CFR.

But even if offers fall, interest will still remain limited, the second Vietnamese trader source told Fastmarkets.

“There’s no point trying to buy Chinese HRC now, because anti-dumping duties may kick in from November onward,” he said.

There has also been market chatter that anti-dumping duties may be applied retrospectively on imported materials since the start of investigations.

Chinese Q235-grade HRC was heard to have traded at $505 per tonne CFR Vietnam, although offers from smaller Chinese privately-owned mills were at $505 per tonne FOB.

Fastmarkets’ weekly price assessment for steel HRC, import, cfr Vietnam, which mainly looks at 2-3mm rerolling-grade SAE1006 HRC and equivalent products, was $515-520 per tonne on Friday, narrowing downward from $515-530 per tonne a week earlier.

A major Japanese producer lowered its offer for HRC to $540 per tonne CFR Southeast Asia, although it wasn’t immediately clear whether it had sold any materials in the past week.

Taiwanese mills had lowered offers to $550 per tonne FOB, which is around $570-580 per tonne CFR Southeast Asia.

“The market is tepid and demand is poor, so business is poor,” a seller source handling Taiwanese HRC told Fastmarkets.

Fastmarkets’ weekly price assessment for steel HRC (Japan, Korea, Taiwan-origin), import, cfr Vietnam was $540 per tonne on Friday, falling by $10 per tonne week on week.

Market participants were also mainly waiting for more market signals amid two major upcoming events, namely the United States presidential election on November 5 and China’s National Party Congress meeting on November 4-8.

Spot prices of HRC in China have remained rangebound in the last three trading days amid a lack of clear direction because market participants are awaiting a meeting of the National People’s Congress on November 4-8 November.

Market participants are waiting for clear decisions or directions on adjusting budget targets, or any new special bond issuance of up to 10 trillion Chinese yuan ($1.40 trillion) in the mid-term.

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