Vietnam: Ferrous scrap imports drop nearly 30% in H1 CY'22

South East Asia's largest buyer of ferrous scrap, Vietnam, recorded ferrous scrap imports of 2.16 million tonnes (mnt) in H1CY'22 as against 3.05 mnt in H1 CY'21. The country's ferrous scrap imports were recorded at 0.48 mnt in June 2022 vis-a-vis 0.49 mnt in the previous month, as per SteelMint data. A marginal decline of 2% in imports was recorded on a monthly basis in June.

The imported market softened amid low buying interest from downstream users and bearish steel market sentiments, while sufficient scrap supply led to a drop in imports. On an annualised basis, too, the country's imports fell 24% from 0.63 mnt in June 2021.

Country-wise breakup

• USA becomes largest supplier: The USA exported 0.17 mnt in June, a significant increase of 21% as against 0.14 mnt in the previous month. The country surpassed Japan as the largest supplier of scrap to Vietnam. Increasing freight rates from other scrap sourcing countries and bid-offer disparity also encouraged buyers to book more US scrap.
  
  
• Imports from Japan fall: Shipments from Japan decreased due to high offers and suppliers are not in a position to reduce prices. Furthermore, the Japanese market was mostly closed due to the Golden Week holidays in May. Around 0.15 mnt was supplied in June compared to 0.16 mnt in the precedding month.
  
  
• Imports from Australia drop: Vietnam's imports from Australia were at 60,000 t in June as against 70,000 t in the previous month, a decline of 14% m-o-m.
  
  

Meanwhile, imports from Hong Kong doubled to 40,000 t in June, SteelMint data shows.

Outlook
Market participants expect that demand for imported material will remain dull due to higher finished steel inventories and steelmakers are likely to prefer domestic material as it is cost-competitive.