Traders in the US sheet steel market have been canceling orders of Vietnamese cold-rolled and galvanized sheet, creating more uncertainty in a market that has been seeing weekly price erosion since late August.
Two traders said Tuesday they canceled their orders with Vietnam in response to the domestic mills' petitions for circumvention inquiries on Chinese sheet that's being processed into CRC and galvanized sheet in Vietnam and exported to the US.
The Department of Commerce has within 45 days of receiving the petition to initiate an investigation and, at that time, it may also make a preliminary circumvention finding. If Commerce makes an affirmative preliminary determination, it will instruct US Customs and Border Protection to suspend liquidation of the material covered under the duty orders and require cash deposits on the imports.
Chinese CRC has a 265.79% dumping margin and a 256.44% subsidy rate. For Chinese galvanized sheet imports, Commerce found a 199.43% dumping margin and a 39.05-256.44% range of subsidy rates.
One of the traders said he canceled his Vietnamese galvanized sheet orders that were scheduled to arrive in December or January, but he's accepting material that's expected to arrive soon. The mills have bought "45 days of confusion," he said and, as a result, a lot of service centers will be without the steel they ordered and will have to source from elsewhere. The trader said he has no obligation to replace the orders with other imported steel, while the second trader said he's "scrambling" to look for alternatives.
A third trader said he still had to make a decision about going forward with orders that haven't shipped and whether he will approach customers to split any potential duties. "What kills a guy like me is we try to play by the rules, and if we have steel that ships today, and this 45-day scenario goes down and if the Vietnamese were to lose, we would lose a lot of money," the trader said.
Market sources saw domestic prices still soft Tuesday, even with uncertainty in the import market. One service center said he saw average base prices for domestic CRC and galvanized sheet at $720/st, but did not specify the order size.
"I wouldn't be surprised if that base remains steady for a couple weeks," the service center source said. "The Vietnamese thing is introducing enough fear into the market to stop the price decay of the last few weeks. I don't think much will come of the trade case because I think the Vietnamese will defend themselves, but the domestic mills will certainly benefit from price stabilization."
A mill source said he has not changed CRC pricing from $740/st in the last week, but said he has not been getting orders for CRC. For hot-rolled coil, the sub-$500/st prices are only for the 10,000 st customers, he said, and most of the market is still higher than $500/st.
With limited buying activity Tuesday, S&P Global Platts held its daily HRC and CRC assessments flat at $520-$560/st and $750-$780/st, respectively. Both assessments are normalized to an ex-works Midwest (Indiana) basis.
