Vietnam: Ferrous scrap imports rise over 15% in 9MCY'24

• Typhoon Yagi impacted steel demand in September
  
  
• Reconstruction activities may boost scrap imports
  
  

Vietnam's ferrous scrap imports reached 3.2 million tonnes (mnt) in the first nine months of 2024 (9MCY'24), marking a 17% increase as compared to 2.74 mnt in 9MCY'23.

According to BigMint's data, on a m-o-m basis, imports decreased by 30% to 0.28 mnt in September 2024 from 0.4 mnt in August 2024.

However, on a y-o-y basis, imports saw a rise of 17%, increasing from 0.24 mnt in September 2023.

Vietnam's reduced ferrous scrap imports in September are majorly due to Typhoon Yagi which severely impacted its steel sector, contributing to overall economic losses of about VND 40 trillion (around $1.63 billion). Infrastructure damage, including roads and railways, disrupted the transportation of steel, leading to delays in supply and distribution. Many steel factories experienced flooding and roof damage, halting operations and reducing output.

Country-wise break-up

Imports from Japan increased: Vietnamese steel mills imported approximately 1.8 mnt of ferrous scrap in 9MCY'24, a significant increase of 72% y-o-y compared to 1.05 mnt in 9MCY'23.

On an m-o-m basis imports dropped by 23% to 211,070 tonnes (t) in August compared to 162,416 t in September which comprised 57% of the total volume imported in Vietnam.

However, on a y-o-y basis, imports surged by 58% from 102,479 t recorded in September 2023.

As per market insiders, the operation rate of electric-arc furnaces during September remained extremely low, and it makes no sense to import more scrap with low demand in the market for steel. Vietnamese buyers maintained a cautious approach, only purchasing small tonnages when pricing was favourable.

The average price for H2 bulk scrap CFR Vietnam in 2024 was $376/t, continuing to decline from the start of the year. This price is comparatively lower than the average of $406/t in 2023, indicating favourable conditions for Vietnam to import ferrous scrap from Japan.

Sourcing from the US drops: Ferrous scrap imports from the US to Vietnam stood at 375,211 t in 9MCY'24, marking a decrease of 34% y-o-y compared to 568,716 t in 9MCY'23.

However, on a m-o-m basis imports dropped significantly by 53% to 35,062 t in September compared to 74,689 t in August. On a y-o-y basis, major mills' ferrous scrap imports from the US saw a rise of 14%, an increase from 30,645 t in September 2023.

The average price for HMS (80:20) bulk scrap CFR Vietnam in 2024 was $399/t. This price is comparatively lower than the average of $419/t in 2023, indicating favourable conditions for Vietnam to import ferrous scrap from US.

Imports from Hong Kong rise: Imports from Hong Kong to Vietnam surged by 66% y-o-y to 450,104 t in 9MCY'24, compared to 270,765 t in 9MCY'23.

However, m-o-m, imports dropped by 9% to 39,777 t in September compared to 42,511 t in August. On a y-o-y basis, major mills' ferrous scrap imports from the US saw a significant fall of 32%, a decrease from 57,056 t in September 2023.

Supplies from Chile rise: Imports from Chile to Vietnam surged by 70% y-o-y to 75,995 t in 9MCY'24, compared to 44,720 t in 9MCY'23.

On a m-o-m basis imports dropped slightly by 5% to 5,088 t in September compared to 5,370 t in August. Y-o-y, major mills' ferrous scrap imports from the Chile saw a fall of 28%, a decrease from 7,074 t in September 2023.

Imports from Australia: Imports from Australia to Vietnam decreased by 43% m-o-m to 31,711 t in September 2024, compared to 55,9954 t in August 2024.

Outlook

In the near term, ferrous scrap requirements are expected to increase following the damage from Typhoon Yagi which is likely to prompt reconstruction demand and thus higher production. This scenario may create a favourable condition for imported scrap in the coming days.