Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Vietnam-based Formosa Ha Tinh steel has scaled down production and delayed the announcement of June shipments offers amid COVID-19 outbreak. The move by one of the leading HRC steel producer indicates the pressure domestic steel demand Vietnam presently faces. The steelmaker lowered its operating rate following the footsteps of many global mills who have curtailed production. In Asia, Japanese steelmakers like JFE or Nippon and in India many primary steelmakers have idled their blast furnaces. 


The company usually announces monthly finished steel shipment prices in mid-month. However, it is believed Formosa looks to take advantage of a rebound in spot prices by postponing its June shipment offers in this month. The steelmaker is likely to announce prices after April 22.


Overall HRC exports prices from India and China rose to $395-405/mt cfr Vietnam, up by $15-25/mt from $380/mt cfr Vietnam a week earlier. A major Indian steelmaker was heard to have sold 20,000mt HRC in the range for June shipments. Indian steelmakers were aggressive exploring exports opportunities as many Russian sellers have already sold out their June shipments cargoes. 


These offers have been held back with the hopes of a recovery in domestic steel demand once markets reopen. At present, the Vietnam government has announced social distancing measures to combat COVID-19 outbreak. Many steel businesses remain shut and steel demand remain weak. Automakers too have suspended their operations amid supply chain disruption. 


Ferrous scrap prices rise on supply shortage 

Vietnamese steel mills are hesitating to buy imported ferrous scrap as offers in both, bulk and containers market have increased by $10-15/mt from a week ago. US-origin HMS 1&2 (80:20) was offered at $245-250/mt cfr Vietnam in bulk cargoes and $225-230/mt cfr Vietnam in containers. Japanese HMS 1&2 (50:50) in small bulk cargoes was offered at $230-235/mt cfr Vietnam, up by $10/mt from the prior week. 



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