Vietnam: Ferrous scrap imports fall by 21% m-o-m in Jul'24 amid weak steel demand

Vietnam's ferrous scrap imports stood at 0.34 million tonnes (mnt) in July 2024 marking a sharp 21% decline as compared to 0.43 mnt in June 2024. According to BigMint's data, on a y-o-y basis imports increased by 100% as compared to 0.17 mnt in July 2023.

Vietnam's reduced ferrous scrap imports in July are majorly due to its lower steel production, resulting from weak domestic demand and falling exports. As per industry reports, Vietnam's steel industry relies on 40-45% ferrous scrap, largely imported, and faces challenges from fluctuating overseas prices, rising freight rates, and competition from East Asian buyers. This dependence on imports makes the industry vulnerable to global market instability. The Ministry has decided to investigate anti-dumping measures on steel from major suppliers like China, South Korea, and India to stabilise the sector.

Country-wise breakup:

Imports from Japan decline: Vietnamese steel mills imported approximately 2,05,255 tonnes (t) of ferrous scrap in July 2024, a decrease of 2% m-o-m compared to 2,10,377 t in June 2024. On a y-o-y basis, imports surged by 139% from 85,809 t recorded in June 2023.

Imports from Australia fall: Imports from Australia to Vietnam decreased by 100% m-o-m to 196 t in July 2024, compared to 41,127 t in June 2024. On a y-o-y basis, major mills' ferrous scrap imports from the US saw a significant drop of 92%, increasing from 2,554 t in June 2023.

Imports from the US drop: Ferrous scrap imports from the US to Vietnam stood at 46,017 t in July 2024, marking a decrease of 18% m-o-m compared to 55,829 t in June 2024. On a y-o-y basis, major mills' ferrous scrap imports from the US saw a significant rise of 119%, increasing from 21,060 t in June 2023.

Imports from Canada fall: Imports from Canada to Vietnam surged by 54% m-o-m to 14,429 t in July 2024, compared to 9,393 t in June 2024. On a y-o-y basis, this represented a magnificent rise of 650% compared to the 1,925 t imported in June 2023.

Imports from Hong Kong rise: Imports from Hong Kong to Vietnam surged by 65% m-o-m to 60,752 t in July 2024, compared to 36,790 t in June 2024. On a y-o-y basis, this represented a significant rise of 82% compared to the 33,465 t imported in June 2023.

Outlook: In the near term, ferrous scrap imports are expected to decline as the domestic and export steel markets are not supporting fresh bookings. Vietnam might remain sidelined with minimal inquiries due to unfavourable price levels, with bid-offer spreads exceeding $10/t.