Vietnamese Hot Rolled Coil (HRC) Market Trends
The Vietnamese hot rolled coil (HRC) market continues to exhibit signs of weakness, with Formosa Ha Tinh Steel (FHS) recently lowering its prices to remain competitive. The mill announced on December 10th that HRC prices for February shipments have been adjusted to VND 13,145/kg ($519/tonne) CFR southern Vietnam for orders of 20,000 tonnes or more, compared to VND 13,530/kg last month. Smaller order quantities see proportionally higher rates, with up to 2,000 tonnes priced at $531/tonne CFR.
This pricing strategy positions FHS below its competitor, Hoa Phat Group, whose February/March shipment prices for non-skin passed SAE1006 or SS400 grade HRC stand at approximately $527/tonne. The competition in Vietnam’s HRC market is fierce, driven by poor demand for coated products both domestically and internationally, alongside increasing local production capacities.
Emerging Supply and Anti-Dumping Measures
Vietnam and neighboring regions are gearing up for new supply influxes, coupled with the potential imposition of anti-dumping duties on Chinese HRC imports. Such measures could significantly impact market dynamics. A Hanoi trader commented, “The imposition of anti-dumping duties on China-origin HRC imports will support Hoa Phat’s sales, positioning it strongly in the market by 2025.”
Hoa Phat is not only increasing its HRC production capacity by 2.5 million tonnes next year but also advancing its Dung Quat 2 expansion project. This includes a newly commissioned 300-tonne blast furnace and a hot strip mill expected to commence commercial production in late Q1 2025.
Regional Developments in HRC Production
Malaysia’s Eastern Steel also plans to begin production at its 2 million tonnes/year hot strip mill by late December. This development, alongside Vietnam’s growing production capacities, highlights the competitive landscape for HRC suppliers in Southeast Asia.
FHS, currently producing 4.5 million tonnes of HRC annually, and Hoa Phat, with a production capacity of 3 million tonnes and an additional 2.5 million tonnes planned for next year, cater to a domestic demand of 13-14 million tonnes per year. However, the introduction of anti-dumping measures is expected to shift competitive advantages within the region.
Conclusion
As domestic HRC prices continue to decline in Vietnam, the market remains under pressure from both supply-side expansions and regulatory changes. While FHS and Hoa Phat vie for dominance, Malaysia’s Eastern Steel enters the scene, adding further complexity to the regional HRC landscape.
