Vietnam's Hoa Phat lowers HRC prices under pressure from China


Hoa Phat’s price cut for its newallocations of domestic hot rolled coil is larger than expected by marketparticipants in Vietnam, Kallanish notes. The domestic markethas deteriorated alongside the plunge in the Chinese iron ore and steelmarkets. Prices are also under pressure due to the return ofcompetitively-priced Chinese material in Vietnam.
The group's flat steel company, HoaPhat Dung Quat Steel, announced on 16 November that it will reduce HRC pricesby the equivalent of $55/tonne from last month. Its new prices for GradeSAE1006/SS400 HRC were 19,000 VND/kg ($834/t) cif Haiphong, 19,050 VND/kg($836/t) cif central Vietnam and VND 19,100 VND/kg ($838/t) cif Ho Chi MinhCity. The prices, which are exclusive of VAT, are for non-skin passed strip andare for January shipment.
Market participants had expected HoaPhat will reduce prices to around $850-855/t but the actual prices are lower, atrader in Ho Chi Minh City says. The other Vietnamese producer, Formosa HaTinh, also reduced its HRC for January/February shipments but theannounced prices on 12 November are around $40/t higher than Hoa Phat.
Formosa’s non-skin-passed hot rolledSAE 1006 was pegged at around $880/t cif Ho Chi Minh City. It would berather difficult to find buyers now because market sentiment is bearish,another Vietnamese trader says. Some of these buyers expect prices to decreaseto $700/t cfr, he says.
Chinese exports have recently beenbooked in Vietnam as Chinese HRC prices are workable. A cargo of 30,000 tonnesof 2.3mm and up thickness SAE 1006 HRC from China was ordered at $835/t cfrVietnam on 11 November.

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