Formosa Plastics Steel Plant announced production cuts in August, Vietnam's hot-rolled import prices rebounded

Release time：Jun 26, 2019 From：admin

After the Formosa Plastics Steel Plant announced that it had cut production by up to one-fifth in August, Vietnam's hot-rolled import prices began to rebound last week.

As of June 24, the CFR reference price for hot-rolled imports in Southeast Asia, which mainly refers to China's 2-3mm SAE1006 re-rolled hot coils exported to Vietnam, rose slightly to US$497-501/ton, up by US$4-6/ton from a week ago. .

Not long ago, Vietnam's Formosa River Static Steel Plant just announced a 16-20% reduction in August production. Before the production cut, the factory's hot rolling regular monthly output was 25-33 thousand tons.

A trader in Northeast Asia revealed that the reduction in production of the Formosa River Steel Plant involves hot rolling of 50,000 tons, and the wire rod will also reduce production by 10,000 tons.

According to media reports, the main purpose of this production reduction of Formosa Plastics Steel Plant is to boost operating profit.

After the news of the reduction of the production of the Formosa River Static Steel Plant, Vietnamese importers raised the CFR Vietnam inquiry price to US$500/ton to ensure more import resources.

On the seller's side, the latest CFR Vietnam offer for back-to-back Chinese-made hot-rolled resources in August was at US$505/ton, and some sellers who were interested in price-cutting shipments even reported a low price of US$497/ton.

A Vietnamese trader said that after a few weeks away from the market, some Vietnamese buyers have reduced their stocks and are likely to return to the market to purchase imported resources in the near future.

A South Korean steel mill also reported that the recent inquiries received were significantly higher than the previous one by $5/ton. Some buyers have the latest CFR Vietnam inquiry price of $510/ton, but the Korean steel mill rejected the inquiry and still insisted on the original offer of $535/ton.

The FOB offer for hot rolled resources in Taiwan is at US$500/ton, equivalent to the CFR Vietnam offer of US$518-520/ton.

Market participants believe that, given the recent high price fluctuations in iron ore prices driven by tight supply, hot-rolled spot prices are nearing bottoming out and there is not much room for downside.

Turkish exporters who have been raising prices in the past two weeks have suddenly disappeared in the Vietnamese market.

Some Chinese resources may flow to Vietnam in the near future, but China's domestic and export markets have been in the upward price channel for the past week.

A Chinese trader said that Chinese export steel mills have been squatting on the break-even line in the near future and have no intention of continuing to cut prices.

The FOB reference price for China's hot-rolled exports last Friday was $485.58/ton, up $1.25/ton from last Monday's $484.33/ton.