[SMM Steel] ASEAN HRC Offers Dip to $535/mt CFR Vietnam as Buyers Stay on the Sidelines

Iron ore prices in the Tangshan area edged lower, with 66% grade iron ore concentrates currently at a dry-basis delivered price, tax included, of 935-940 yuan/mt. Operations at mines and beneficiation plants remain at relatively low levels overall, with state-owned mines mostly using their ore powder internally and private mines facing tight concentrate supply. Steel mills have begun to incur losses and currently have a relatively strong desire to bargain down domestic concentrates prices.

As of September 15, the operating rate of 50 EAF steel mills mainly producing construction steel nationwide stood at 35.56%, up 0.84% period-on-period; the capacity utilization rate was 35.84%, up 1.41 percentage points PoP; and average daily construction steel output was 79,800 mt, up 3,100 mt PoP.

Today, the HRC main contract closed at 3,309 yuan/mt, trading in a weak, range-bound pattern with a full-day decline of 0.09%. In the spot market, both hot-rolled and cold-rolled coil prices held steady on the day, with moderate trading activity.On the supply side, the impact from HRC rolling line maintenance this week amounted to 109,700 mt, down 12,900 mt from last week, with output recovering modestly. However, the market is abuzz with talk that a number of steel mills, constrained by losses, are stepping up maintenance activity. SMM is continuing to track these developments, though the impact on hot-rolling operations remains limited for now.On the demand side, the "Golden September" peak season is still in the process of gradually materializing. Construction activity, affected by the lag in earlier funding transmission, has yet to show concentrated restocking. Downstream acceptance of high-priced resources remains low, while low-priced resources are trading reasonably well. That said, cost pass-through continues to provide solid support on the downside, and coil prices are expected to remain range-bound.