Report by Wang.Shang-Yi

Vietnam’s Formosa Ha Tinh Steel Corporation (FHS) announced new prices for its products today (12th). The price of hot-rolled coils remained stable, while the price of wire rods decreased by $20 per ton. Industry insiders mentioned that although steel prices in the Chinese market rebounded, international demand has not shown signs of improvement. Therefore, the price decline seems to be within a reasonable range. The continuous price adjustments by FHS have put significant downward pressure on the opening price of China Steel Corporation’s wire rods for the third quarter.

FHS has been continuously lowering its prices in the past few months, with a total reduction of $113 per ton in the last four months, equivalent to NT$3,390. Initially, market participants believed that if FHS’s new prices stopped declining, the drop in China Steel Corporation’s wire rod prices might narrow. However, FHS unexpectedly continued to decrease its prices, making it even more challenging for China Steel Corporation’s opening price.

Traders indicated that the reason for the price decline reflects limited international demand and limited order volumes for steel mills, leaving them no choice but to lower prices. It is worth noting that after the price adjustment in June, FHS’s prices seem to have almost reached the bottom, and it would be difficult for steel mills to lower prices further. It is anticipated that this opening price might stimulate some order placements.

The market expects that since FHS’s prices continue to decline, there is no reason for China Steel Corporation’s wire rod prices to narrow. Customers are also hoping for a further price reduction by China Steel Corporation, as it would help with screw order placements. China Steel Corporation is expected to announce its new prices next Monday, with an anticipated decrease of NT$2,000-2,500 per ton for the third quarter.