Vietnam: Bulk ferrous scrap import prices from the US drop $4/t w-o-w amid slow buying activity

• Vietnam's scrap market weakens with slow restocking and reduced mill activity
  
  
• Steel mills run at 50-60% capacity, balancing production amid uncertainty
  
  

Vietnam's imported scrap market experienced a slight decline this week, with trading activity slowing down due to the year-end market closure. Scrap demand remained subdued, while market participants noted that restocking efforts would take longer to gain momentum after the holiday break.

Mills refrained from significant restocking due to sluggish finished steel demand and are intent on keeping inventories lean.

Steel producers have maintained a reduced level of operations at 50-60% of capacity, carefully balancing production with prevailing market uncertainties.

Offers for Japanese H2 scrap remained steady at $315-320/t CFR Vietnam, while bids stayed below $310/t CFR, reflecting cautious buyer sentiment in a subdued market. Buyers with ample inventories continued to monitor potential shifts in supply and demand, as well as policy changes following Donald Trump's election as US president.

CFR assessments

• Deep-sea bulk US cargoes of HMS (80:20) stood at $348/t, down by $4/t w-o-w.
  
  
• Japanese-origin H2, a major tradable grade in Vietnam's scrap market, was at $322/t, stable w-o-w.
  
  

Market scenario

Vietnam's GDP growth accelerates in 2024

Vietnam's economy expanded by 7.09% in 2024, surpassing 5.05% growth in 2023, according to government data. Fourth-quarter growth reached 7.55%, driven by robust industrial production and exports. The General Statistics Office emphasised the significant recovery momentum, reflecting Vietnam's resilience amid global economic challenges.

Hoa Phat lowered HRC (SAE1006) prices by $5/t m-o-m for March-April'25 sales to $519/t (excluding VAT) in southern Vietnam. The reduction aims to staying competitive amid weak domestic demand and cheaper Chinese imports.

In contrast, in Northern Vietnam, domestic scrap prices were reported to be elevated, making imported scrap more attractive and cost-effective for buyers, according to sources.

Another trader mentioned, "In the domestic market, scrap prices in Northern Vietnam remained relatively high, while Southern Vietnam saw lower prices, making them a more competitive alternative to imported scrap."

Outlook

In the short term, market activity is expected to pick up gradually as operations resume post holidays. However, sources indicate that restocking efforts may remain slow, requiring additional time to recover fully. Buyers are likely to adopt a cautious approach, closely monitoring market trends and demand signals before committing to substantial purchases.