Buying activity in the Asian hot-rolled coil market remained slow Sept. 21, even as bearish buy-side sentiment in Southeast Asia was exacerbated by news of China’s property behemoth, Evergrande, facing a debt crisis.

          S&P Global Platts assessed SAE1006 HRC at $890/mt CFR Vietnam, down $3/mt day on day. On a CFR Southeast Asia basis, the SS400 grade HRC of coil was assessed at $878/mt, down $3/mt over the same period.

          While activity from various steel producing nations, including China, Japan, and South Korea remained muted on account of festivities, buy-side market participants in Southeast remained sidelined.

          This was especially on account of market reaction to the slow collapse of Evergrande, the Chinese property developer.

          “Honestly Vietnamese players do not care much about this Evergrande scandal. They will just go back to buy crazily again when the pandemic is contained,” a Vietnam-based trader said.

          Market participants had mixed views on the probably ripple effects of this news on the physical steel markets in China, with some believing that the Chinese government will be able to handle the situation.

          “I feel the market sentiment is getting weaker overall, regardless of Evergrande issue,” a Korean mill source said. “Starting from billet price collapse, and slab following, flat price could also weaken in the end.”

          Market participants said that sell-side indications from Indian mills will have to imminently drop, in view of the slow markets as well as Evergrande development.

          “There will be a lull for at least three weeks in general and buyers will hold back,” a Mumbai-based trader said.

          Sources pointed out that Vietnam buyers may only be able to accept $850-$860/mt CFR, even though sell-side indications were higher than $890/mt. Market chatter also brought forth a prospective anti-dumping duty by the European Union on Vietnamese galvanised steel, even though the same was not confirmed.

          “Everyone will wait and watch. The market was already weak due to iron ore falling, low demand in China etc. this news will make everyone even more nervous,” a second Mumbai-based trader said, adding that Indian mills may revise offers in the first week of October.

          Separately, according to an Indian trader, a major Indian mill may have booked 10,000 mt HRC to Malaysia at around $940/mt CFR level. However, the same could not be confirmed with other market sources.

-- Steel Business Briefing