Vietnam: Bulk ferrous scrap import prices fall $8/t; demand weak ahead of Lunar holidays

• Vietnam to tighten imported scrap standards
  
  
• H2 price softened on ahead of Lunar New Year
  
  

Vietnam's imported scrap market witnessed a sharp decline in the last seven days, by up to $8/tonne (t) primarily driven by the persistent gap between buyer and seller expectations. Buyers were targeting $305-308/t CFR Vietnam for H2 scrap grade from Japan, while sellers were holding firm on tradable prices between $315-320/t CFR, resulting in subdued market activity.

In Vietnam, H2 prices reportedly softened as demand remained weak ahead of the Lunar New Year. Spot market activity was limited, with some buyers indicating they had sufficient inventory to meet their short-term needs.

Despite the January Kanto H2 grade scrap tender closing at a higher price, some market participants believe it will have minimal influence on spot price trends due to the prevailing demand and supply conditions. Domestic FAS H2 collection prices in Japan remained range-bound at JPY 40,000-40,500/t.

A potential deal for H2 scrap was said to have been concluded earlier this week at $305/t CFR Vietnam.

HS offers were heard at $340-350/t CFR Vietnam and $345/t CFR Taiwan, with a bid recorded at $335/t CFR Taiwan.

Deep-sea HMS (80:20) scrap prices softened to $336-338/t CFR. Indicative deep-sea offers were heard at $350/t CFR Vietnam -for US-origin cargoes and $345/t CFR Vietnam for Australian-origin material, with bids for both ranging between $335-340/t. Amid limited deep-sea offers and subdued demand, some Vietnamese buyers have shifted to containerised (80:20) scrap as a cost-effective alternative.

Restocking expectations

According to a Vietnam-based trader, mills may need to restock, but which is expected to be at minimal levels due to the lack of sales improvement after the New Year. Given the significant price gap between bulk and container scrap, some market participants were opting for HMS (80:20) containers as a temporary alternative.

CFR assessments

• Deep-sea bulk US cargoes of HMS (80:20) were assessed at $340/t, down by $8/t w-o-w.
  
  
• Japanese-origin H2, a major tradable grade in Vietnam's scrap market, was down by $7/t at $315/t.
  
  

A mill-side participant noted that while prices typically rise after the Lunar New Year, this year it seems unlikely, with many market participants taking a cautious wait-and-see approach. A trader pointed out that with Turkish scrap prices remaining high, Vietnam struggles to compete at those levels, which may lead to a slight decline in Vietnamese scrap prices due to competitive billet prices.

In southern Vietnam, domestic scrap prices are competitive because of imports, but slow downstream demand has led to bearish sentiment.

Formosa Ha Tinh (FHS), Vietnam's largest steel producer, reduced its hot-rolled coil (HRC) prices by approximately $5/t m-o-m for February 2025 sales. Following this adjustment, FHS's HRC prices (SAE1006, skin-passed) were at around $515/t CIF Ho Chi Minh City. Meanwhile, demand in Vietnam is expected to remain weak in the near term due to the upcoming Tet holidays in the region.

Vietnam to implement new scrap regulations

In regulatory news, Vietnam's Ministry of Natural Resources and Environment has introduced new regulations for imported scrap materials, effective July 2025. These regulations cover iron, steel, cast iron (QCVN 31:2024/BTNMT), glass (QCVN 65:2024/BTNMT), non-ferrous metals (QCVN 66:2024/BTNMT), plastic (QCVN 32:2024/BTNMT), and paper scrap (QCVN 33:2024/BTNMT). The aim is to enforce stricter environmental standards and ensure high-quality scrap materials for production.

Outlook

Freight rates are anticipated to remain steady in the short term, with stable vessel availability expected for February and early March shipments. In southern Vietnam, domestic scrap prices are likely to maintain a competitive edge over imports. However, sluggish downstream demand and cautious buyer activity have dampened market sentiment, making post-Lunar New Year price increases unlikely. Market participants are closely monitoring trends for clarity, with bearish sentiments likely to prevail in the near term.