The hopes for recovery that were seen last week have all but disappeared this week as downward pressures resurfaced in the entire steel market. Global declines, particularly in China, have kept the Vietnamese steel market in a state of stagnation and price reductions. As a result, the prospects for recovery have been pushed further back, rather than in June as previously forecasted.

 Imported Scrap Market:

The market showed signs of more positive activity as "cheap" scrap prices from Europe have consistently been agreed upon at around 415-420 USD/ton CFR, while high-grade scrap prices are around 435-440 USD/ton CFR. Due to these prices, the import scrap transactions with Japan have continued to be interrupted as Japan's H2 prices are at around 440 USD/ton CFR. Since the imported scrap prices are still decreasing, many Vietnamese mills are mainly focused on the import market, adding pressure to the domestic market.

 Domestic Scrap Market:

 The slight upward trend from the previous week has disappeared. This week, Pomina 3 and Quoc Bao have reduced prices by 100-200 VND/kg. However, the noteworthy development is that VAS has stopped purchasing scrap at the end of the week. In May, VAS had also stopped purchasing scrap for about 2 weeks at the end of the month. The domestic scrap market, which had seen a slight increase, is now facing the risk of decline as Duong Son billet prices have decreased significantly, domestic billet prices are turning downwards, construction steel prices are decreasing, and imported scrap has also decreased.

 Exported Billet Market:

 The price of billets at Duong Son has shockingly decreased by 200 RMB/ton at the end of the week, leading to an inventory of over 1 million tons. This will likely freeze Vietnam's billet exports to China. Meanwhile, offers to Southeast Asia have also slightly decreased by 10-20 USD/ton due to weak demand. In 2021, billets were the main export item in terms of volume and value in the steel industry, but in 2022, everything has changed, at least in the last six months.

 Domestic Billet Market:

 The trend shifted from an increase last week to sideways movement and then a decrease this week. Although billet prices have only slightly decreased, few transactions have taken place, so there is a higher likelihood of rapid price decreases in the coming week as the factors supporting billet prices have all decreased.

 Imported HRC Market:

 The offer price from India is still low, but there have been no simple transactions because HRC prices from China have decreased too quickly. The forward price is facing the risk of reaching 650 USD/ton CFR in the coming week, and the offer price for SS400 could reach 700 USD/ton CFR if China's drastic production cuts to "save" the market are unsuccessful. In addition, Formosa's significant reduction in HRC prices in June, for delivery in August, is also a factor causing difficulties in the import market.

 Domestic HRC Market:

 The immense pressure has caused domestic retail prices to continue decreasing, despite already being lower than import prices. However, the more concerning issue is that China's forward prices are still decreasing, pulling the Vietnamese steel market into a general decline. China's HRC inventory is currently at a record high, and this is unlikely to change in the short term. Therefore, the Vietnamese market will be strongly affected in terms of sentiment and purchasing power.

 Construction Steel Market:

Hoa Phat and many other mills have reduced prices slightly, but pressure still remains as scrap and billet have lost their momentum. Additionally, unfavorable weather is slowing down consumption and increasing inventory. It is not ruled out that there will be further reductions from mills in the coming week.

 Pipe and Box Steel Market:

 Waiting for new HRC prices from Formosa and Hoa Phat, and then witnessing the significant drop in forward prices, have prompted mills to recalculate price trends in the coming period. Therefore, there were fewer adjustments this week, and the market is likely to be volatile in the following week.

Corrugated iron Market:

 Compared to other items, corrugated iron prices are still at a high level due to the advantage of export, which helps significantly reduce pressure on domestic consumption. However, as HRC prices approach 700 USD/ton CFR, corrugated iron prices will soon have to be adjusted.

 Source: Giá Thép Tôn