A new wave of Covid-19 cases in some major Vietnamese cities has pulled buying interest from re-rollers down and prevented prices from further increases, sources said.
“Demand had been stable in the past few weeks but now buyers are in wait-and-see positions due to the sudden outbreak,” a Vietnamese trader told Fastmarkets on Thursday July 30.
Vietnam currently has 620 confirmed infections, with most of it in Danang, while the major cities of Ho Chi Minh City and Hanoi have also detected some locally-transmitted Covid-19 cases.
This has led Vietnam to re-implement social distancing measures and business closures, Fastmarkets understands.
“There have been limited negotiations in the past week because of the outbreak while some buyers are still at the tail end of negotiations with Formosa Ha Tinh Steel Corporation,” another Vietnamese trader told Fastmarkets on Thursday July 30.
***Indian steel mills
Indian steel mills offered SAE1006 HRC at $480-485 per tonne cfr Vietnam at the start of last week, but offers dipped to $480 per tonne cfr Vietnam by the second half of the week after news of the outbreak broke, trading sources said.
There were limited bids heard from re-rollers, although pipemakers were still bidding at around $460 per tonne cfr Vietnam, sources added.
There was market chatter that an Indian cargo had been sold at $482 per tonne cfr Vietnam in the past week but market participants dismissed this as mere chatter and said that no buyer in Vietnam would accept this price.
***South Korean HRC
A major South Korean HRC producer withheld offering for the past week, expecting prices to continue increasing near term, while a major Japanese HRC producer offered HRC at $505 per tonne cfr Vietnam and at $520 per tonne cfr Indonesia.
Market participants still expect demand for October-shipment material to pick up in the coming weeks, however, while buyers will need to start negotiations on substrate raw materials for October-November production, a buyer at a Vietnamese re-rolling mill said on Thursday July 30.
The market sentiment in Asia supports the idea that Chinese domestic demand will remain stable for most of the second half of 2020, keeping the import arbitrage window open and soaking up regional HRC supply.
“Vietnamese buyers are very aware of this after Formosa Ha Tinh Steel started exporting more to China, causing some supply shortages for certain buyers in domestic markets,” a second buyer at another Vietnamese re-rolling mill said on Thursday July 30.
Fastmarkets’ weekly price assessment for steel HRC import, cfr Vietnam, which mainly looks at 2-3mm re-rolling-grade SAE1006 HRC and equivalent products, was at $470-475 per tonne for the week ended Monday August 3, unchanged week on week.
The political tension between China and the United States after the tit-for-tat consulate shutdowns has not dampened sentiment in the domestic market, with prices in east China remaining stable, sources said.
***Chinese steel mills
Major Chinese steel mills have also increased their offers with Liaoning-based Benxi Iron & Steel raising its offer by $5 per tonne to $495 per tonne fob, while Jiangsu-based Shagang maintained its offer price at $500 per tonne fob.
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