Hot-Rolled Coil Prices Strengthen Amid Rising Costs and Inventory Buildup; Consolidation Expected

Last week, Vietnam’s steel market showed a mixed trend, with construction steel prices remaining relatively firm while HRC continued to face pressure from weak demand and low-priced imports. HRC prices remained relatively soft as cautious buying and strong competition from imported material, particularly from China, limited domestic mills’ pricing power. By contrast, domestic construction steel prices remained stable at around US$594/t EXW, equivalent to VND 15,500/kg, supported by firm upstream costs and limited competition from imported rebar due to tighter technical requirements and trade-remedy measures, while some distributor restocking provided support to market sentiment. Overall, the market remained divided, with long steel showing greater price resilience while HRC continued to face pressure from cautious demand and import competition.

[Vietnam] Vietnam’s steel market remained relatively stable, with construction steel prices easing slightly to around 530 USD/tonne EXW despite VND depreciation, while domestic prices in VND remained largely unchanged. HRC prices stood at approximately 514–521 USD/tonne CFR Ho Chi Minh City. Iron ore prices are receiving short-term support from expectations of a recovery in hot-metal output and a modest improvement in end-user demand, although significant supply pressure remains in the medium and long term. Meanwhile, the sharp rise in coal prices continues to erode steel mill profitability, while tight short-term supply is expected to remain difficult to ease in the near term. With no new price announcements from mills today, market participants increasingly expect the next pricing scheme to be introduced after the September 2 Independence Day holiday, keeping the market in a wait-and-see mode in the near term.

The EU flat steel market officially entered the "realization phase" of its price-hike cycle this week. Northwest European HRC stabilized at a high of 732 EUR/tonne EXW (852 USD/tonne EXW), while the Italian spot market bottomed out and rebounded post-summer holiday to 721 EUR/tonne EXW (840 USD/tonne EXW). Notably, HRC import CIF assessments (655–660 USD/tonne CIF Italy) recorded their first gain of the year. On the transaction front, mainstream Northern European mills finalized actual orders of approximately 25,000 tonnes at 730 EUR/tonne EXW (850 USD/tonne EXW), while maintaining a firm stance on Q4 forward offers. On the flat steel import side, Indian resources were rapidly hiked to 680–685 USD/tonne CFR following initial small-volume trades, while Southeast Asian Q4 shipping quotas were already sold out, effectively closing off low-cost alternative sourcing channels for European buyers. The long products segment extended its weak trend, with Italian domestic rebar prices holding flat at 695 EUR/tonne EXW (809 USD/tonne EXW). Additionally, forward cost uncertainties stemming from the advance implementation of CBAM have begun disrupting pricing for long-cycle engineering projects extending into 2027. In the semi-finished segment, EU slab imports reached a period high of 3.11 million tonnes in H1, with Brazilian origins surging to 900,000 tonnes leveraged by their low-emission advantage under CBAM. The primary short-term concern is that large steel service centers assess their September inventories as relatively ample; thus, the first post-holiday round of actual procurement will serve as the "litmus test" for this round of price hikes. Looking ahead to next week, whether mills can keep quotes firm while generating trading volume will determine the slope of September's trajectory.