Spot prices of hot-rolled coil in the Asian market picked up July 17, as Vietnam buyers raised bidding amid higher import offers even as local HRC producer Formosa Ha Tinh Steel, or FHS, increased its monthly offer.
S&P Global Platts assessed SAE1006 HRC at $467/mt FOB China July 17, up $9/mt on the day. On a CFR Southeast Asia basis, the same grade of coil was assessed at $456/mt, up $8/mt on the day.
In Vietnam, bids went up to $455/mt, despite scarce offers for imported cargoes were heard. Offers for Indian SAE1006 coils were heard at $475/mt for September shipment. This was especially so after FHS offered prices to its customers on an individual basis on July 17, similar to its practice since April this year.
Market participants found the offers “fair” and “reasonable” given the much higher imported offers.
"With current situation, and good quality compared to India/Russia; I think their [FHS] price is fair," said a Vietnam-based reroller. “But many buyers [are] still asking for below $450/mt CFR. The question is, which mill wants to sell at that level.”
Offers for SAE1006 coils by the local mill were heard at $462-$469/mt for September shipment, being raised by $12-$15/mt on the month
There was market murmur that FHS would increase its export allocation relatively this month, so as to conclude bookings into China.
"FHS's new offers is cautious this time. I heard [that] the mill targets to collect orders of 200,000 mt this time," the same Vietnam-based trader said.
Meanwhile, Korea’s Hyundai Steel holding on from offering today, after concluding 20,000 mt in China earlier in the week.
Separately, Platts assessed SS400 HRC 3 mm thick at $460/mt FOB China July 17, up $3/mt from July 16. On a CFR Southeast Asia basis, the same grade of coil was assessed at $455/mt, up $1/mt on the day.
Chinese mills held their offers stable, even as better buying interest was being seen from Pakistan based buyers at $490-$500 CFR basis, with some deals for smaller quantities already concluded.
.There was market chatter of Korea’s Posco concluding thinner gauge HRC sales to China at $472-$475/mt; however the same could not confirmed.
“I am unsure if that [imports] pose a threat for domestic China sales,” an eastern China based mill source said. “But during this rainy season, we might see a drop in [domestic] sales, maybe picking up after end august.”
In Shanghai, the spot price of Q235 5.5 mm HRC was assessed at Yuan 3,890/mt ($555.8/mt) ex-stock, including value added tax, unchanged from July 16. On the Shanghai Futures Exchange, the most actively traded October contract closed at Yuan 3,752/mt, up 0.5% over the same period.
-- Ashima Tyagi, Analyst Yuelin Dai
