Tighter restrictions on Covid-19 in southern Vietnam are expected to further reduce steel demand. Residents of Ho Chi Minh City have been banned from leaving their homes from 23 August for two weeks in order to counter the rise in infections.
“The market will deteriorate due to stricter social distancing measures,” says a Vietnamese trader. “We call for the closure of all companies, including supermarkets. The military will be responsible for distributing food and water to those in need, ”says another. The isolation introduced in the city will last until September 15.
According to the director of the plant, the steel mills are located outside the city, so they can work. “Only demand is now at the bottom, as many (construction and construction) projects have been stopped,” he says. Steel exports are somewhat delayed due to labor shortages in Vietnamese ports. “We are seeing delays, especially for cargo that has to go through the Cat Lai port in Ho Chi Minh City,” he says. According to one trader, overloading in Vietnamese ports has reduced the number of ships destined for the delivery of steel abroad.
The shutdown of factories, which began last month, has caused a sharp decline in local demand. “No one can sell anything in the local market,” says the Vietnamese trader. This has forced Vietnamese factories to turn to export markets to curb growing stocks of steel, especially billets, rebar and wire rod.
Meanwhile, the Vietnamese hot rolled coil market is stagnant. Many HRC users have stopped shopping because they are unable to sell their recycled steel products in the local market. Russian and Indian proposals for SAE 1006 HRC remain at $ 880 per tonne in Vietnam and $ 900-910 per tonne in Vietnam.
Vietnamese users are not even interested in buying local HRC from two domestic factories. “Buyers anticipate that the market trend will be slow next month, so no one dares to buy now,” says another trader. According to trade sources, the demand for HRC in Ho Chi Minh City accounts for 60-70% of the total demand in Vietnam.