Vietnam ferrous scrap imports hit 11-months high in August

SE Asia's largest ferrous scrap importer- Vietnam reported increase of 28% m-o-m in its monthly scrap import volumes in Aug'20. Imports stood at 0.61 mn t in Aug'20. Imports in August have reached an 11-months high since Sep'19, as per customs data maintained with SteelMint.

On yearly premise, scrap imports during Jan-Aug'20 rose by 10% y-o-y to 3.58 mn t. Japan remained the largest scrap exporter at 0.31 mn t, up 24% on month and 36% on year. Followed by the USA and Australia, Imports from the USA recovered by 63% m-o-m to 0.14 mn t.

Cargoes that cleared customs in August were mainly booked during June and July end. Japanese ferrous scrap prices dropped after they rose to a peak in the middle of June. Vietnamese mills restocked more seaborne scrap when prices were lower.

Key highlights -

• Many Vietnamese mills shifted preference for US deep-sea cargoes from the end of May when Japanese H2 prices rose rapidly and were offered at similar levels. SteelMint's monthly average price assessment for bulk H2 scrap stood at $260/t CFR Vietnam in Jul'20 and that of bulk US HMS (80:20) stood at $265/t CFR Vietnam in Jul'20.
  
  
• Domestic scrap prices in Vietnam increased by VND 100-200/kg to VND 6000-6500/kg in Aug'20, as per VSA data.
  
  
• On the other hand, imported billet prices in Vietnam increased by $20 m-o-m in Jul'20 and further by $5 in Aug'20.
  
  
• Although the COVID-19 pandemic broke out again in Vietnam in end July in Danang and spread to some other provinces across the country which hindered the production. However, the growth rate in investment capital from the state budget in Aug increased by 45% y-o-y, as per VSA.
  
  

Outlook - Vietnam mills have recently booked bulk scrap cargo from the UK. Hence, we can see some import cargoes coming in from the UK apart from usual sources of Japan & USA.