The rapid decline in hot rolled coil offer prices in Southeast Asia has caught regional market players offering 3-12mm SS400B HRC at $675-680/tonne CFR Vietnam compared to $690-695/t cfr early last week.
Certain low-priced offers of Chinese-origin 3-12mm thick SS400B HRC are at $665-670/t cfr Ho Chi Minh local stockists tell SBB.“The low-priced offers are due to pre-selling by traders and stockists" a Chinese trader says. Likewise, some traders are offering 2mm base SAE 1006 HRC from Korea and Taiwan at around $705/t CFR Vietnam, down $10/t from last week.
Despite the lower prices, buying is very thin – chiefly because of the general market perception that prices could dip by a further $20-25/t before stabilising.
Some pessimistic market gossip in Vietnam suggests that Chinese HRC prices could fall as low as $630 cfr before recovering. But a Vietnamese trader dismisses this: "the Chinese mills will not allow HRC price to fall so far because they will lose money. They will cut output before this happens.
“There are some brave and bold buyers,” a Singapore-based regional trader tells SBB. “They think that since prices have fallen steeply, prices will also jump steeply and are buying on this basis.” However,traders say that the main problem they face now is getting importers to give bids.
The weakening of regional currencies against the dollar last month sparked the recent downturn in HRC prices, combined with softening iron ore and coking coal spot prices. "Demand has been thin for a longtime and mills now realise that they need to lower prices if they want to move their products,” says trader.
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