Chinese hot rolled coil deals are taking place without the burden of the rumored export tax. Suppliers have been insisting that buyers contractually commit to paying up in full the tax if it is levied before the cargo is shipped out. But importers in ASEAN are resisting purchase contracts which stipulate this condition.
A small, 3,000-tonne lot of ChineseSS400 grade HRC was ordered on 24 June at $860/ton CFR Vietnam. A Vietnamese trader hears the mill will place HRC for export in a bonded warehouse before any export tax is levied. Early last week, hot rolled cut A36 3-12mm thickness sheet from the same Chinese mill was booked at $887/t CFR Vietnam. Re-rolling SAE 1006 HRC from the mill is currently offered at $880/t CFR Vietnam, Vietnamese trading sources said on Friday.
A regional trader says he had a similar bonded warehouse arrangement for an HRC booking from another Chinese mill to the Philippines earlier this month. He relates that the customer paid a few dollars extra for the bonded warehouse charges to ensure any export tax was avoided.
Current SS400 HRC offers from another Chinese mill are pegged at $860-870/t CFR Philippines. A small cargo of 3-12mm SS400 HRC from this mill was recently booked at $865/t CFR Vietnam, a Chinese trader reports. While there is no obligation for the buyer to pay the rumored export tax, he says there will be negotiation if any export tax is enforced prior to shipment. Most orders in Vietnam for HRC have been for 1,000-2,000t each. “Demand is very slow,” he says. He attributes this to the ongoing Covid-19 outbreak in the country.
Chinese trading sources say that weak HRC demand has forced certain Chinese mills to lower export prices, particularly for SS400 HRC. However, the large state-owned Chinese steel enterprises are still offering at higher levels. These offers for2-2.5mm thickness SAE 1006 HRC are at a minimum of $920-930/t cfr Vietnam and for 3mm and up SS400 HRC at around $930/t CFR Philippines. The lowest-priced offer of Indian 2mm up thickness SAE 1006 HRC in Vietnam is currently at $980/t CFR, down from $1,000/t a week ago.
Kallanish lowered its SAE 2-2.7mmthickness HRC assessment on 25 June to $900-970/t CFR HoChi Minh City, down $50/t on-week.
Short comments: The export contraction of hot-rolled steel coil will inevitably lead to the increase of the price of hot-rolled steel. Therefore, customers can choose drum closure, drum clamp and other products made by our cold-rolled steel coil.
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