SE Asian HRC import prices continue slide, buyers hold off

Offer prices for hot rolled coil continue to tumble in Southeast Asia, particularly in Vietnam. Chinese offer for 3-12mm thick SS400B HRC to Vietnam are now heard at $640-650/tonne CFR, down from $665-675/t week ago.

“Chinese HRC prices appear to be collapsing,” a Vietnamese importer tells SBB. The plummet in Chinese HRC prices has been sharp and rapid – down around $50/t over the past two weeks. Regional traders believe that Chinese exporters are in a hurry to sell because of liquidity problems and concerns over slowing economic growth in the country.

The prices for other origins are similarly falling. Offers of 2mm SAE 1006 Korean HRC are now $685-690/mt CFR from around $705/t CFR a week ago. A lot of around 25,000t of Japanese 2mm base re-rolling grade HRC was booked last week at around $695/t CFR Vietnam.

Around 25,000t of Ukrainian 2-3mm commercial grade HRC was booked at $680/t CFR Vietnam more than two weeks ago. “It was before the plunge in coil prices,” says a trader who believes that importers will rather delay purchases since prices have not bottomed out.

Importers are hesitating to book in the current bearish market. "Traders keep lowering prices to get bids. But buyers cannot decide whether to buy if prices keep falling,” a local trader tells SBB. This constant lowering of prices is undermining buyers' confidence in the market, he adds.


The Taiwanese mills are noticeably not offering HRC to Vietnam. "The mills here cannot compete," Taiwanese trader says. They are aiming to export HRC at around $700/t FOB.

Vietnamese construction steel sales up 21% m-o-m in July

Sales volume of construction long products in Vietnam in July reached 359,000 tonnes, an increase of 20.5% from the previous month but down 32.4% year-on-year, according to the Vietnam Steel Association (VSA). Production of longs in June at 308,000 t was down by 11.2% m-o-m and lower by 29.1% y-o-y.

Cumulative sales of longs during the first seven months of this year reached 2.78m t, up 3.2% compared with January-July 2010. Production rose to 2.89m t, an increase of 7.7% over the corresponding period last year.

“Steel sales slowed down in June,” VSA vice-chairman and general-secretary Dinh Huy Tam tells Steel Business Briefing with reference to sales dipping to just under 300,000 t for that month. He tells SBB that steel demand in August will be adversely affected by a slowdown in construction activity. This is due to the rainy season as well as the Hungry Ghost Festival taking place this month.

The tight monetary and fiscal policies being implemented in Vietnam to stem high inflation continues to have a negative impact on steel consumption, says Tam. Inflation during the first seven months of this year reached 14.6% and bank borrowing interest rates are prevailing at more than 20% per annum.

The VSA tracks data from its member steel mills that together contribute around 85% of Vietnam's long steel production.


Korean domestic H-beam prices firm slightly.

Korean spot market prices for H-beams produced by domestic mills have climbed to KRW 970,000r - 990,000/t ($892-910/t) for SS400 grade ‘junior’ beams this week, up by KRW 20,000-30,000/t ($18-27/t) from late July.

The climb reflects efforts by local dealers to pass on their higher input costs to end-users in tandem with rising prices from the two producers Hyundai Steel and Dongkuk Steel Mill.

In late July, Hyundai announced higher sales prices for H-beams and sections starting from 1 August of KRW 30,000-40,000/t depending on product and size, as SBB reported. With an upturn in market sentiment, spot prices for China-origin H-beams of similar size have also seen a small rise over the past two weeks of KRW 10,000-20,000/t to reach KRW 880,000-900,000/t ($809-827/t).

Buying activity among end-users remains thin for the moment, but industry sources believe H-beat prices will remain firm for the rest of this half. They cite several factors including higher input costs for mill from new electricity charges, output constraints during July-August due to summer maintenance, and expected better construction sector demand from autumn, as SBB has reported.

Meanwhile, Korea’s total H-beam output in this year’s first half stood at 1.53mt, up 4% from 1.47mt in H1 2010, according to Korea Iron & Steel Association data. Within the total, exports reached 668,200 t, up 6.1% y-o-y. But the total output for sections including angles and channels in H1 declined by 5.1% y-o-y to 2.08mt.

Source: SBB