Vietnam: Ferrous scrap imports up 13% m-o-m in May'21

Ferrous scrap imports by Vietnam, South East Asia's largest importer of the material, were at 0.62 million tonnes (mn t) in May'21, up 13% against 0.55 mn t in Apr'21. However, on a y-o-y basis, import volumes increased by 82% compared to 0.34 mn t in May'20. Vietnam's scrap imports rose on the back of rising global demand for steel billets and active restocking amidst strong steel demand compared to the corresponding period last year (CPLY).

Imports from Japan stable: Vietnam's scrap imports from Japan remained steady at 0.28 mn tin May'21. The latter retained its position as the top scrap supplier to Vietnam. The US was the second largest scrap supplier, followed by Australia.

Rise in imported scrap prices: SteelMint's monthly price assessment for bulk H2 scrap stood at $461/t CFR Vietnam in Apr'21 as against $448/t in Mar'21. However, US bulk HMS (80:20) was at $458/t CFR Vietnam in Apr'21 against $451/t CFR a month ago. Japanese scrap suppliers kept their scrap export offers high, profiting from China's active buying trend before the Dragon Boat Festival holiday.

Domestic scrap prices up: Domestic scrap prices increased further in Apr'21. The H2 grade prices stood at VND 10,800/kg ($470/t) and the H1 grade at VND 11,100/kg ($483/t).

Steel output, sales up y-o-y: The production and sales of steel products in the first four months of 2021 (Jan-Apr'21) increased significantly, as per a report released by the Vietnam Steel Association (VSA). Production of steel reached 2.82 mn t in Apr'21, decreasing by 4.75% m-o-m but up 52.2% against CPLY. However, sales of across steel categories were recorded at 2.70 mn t in Apr'21, down 6.22% m-o-m compared to Mar'21. But, the same increased by 56.7% over CPLY.

Current market scenario
Limited trading activities are seen due to disparity in bids and offers and a sluggish finished steel market. Domestic mills continue to slash bids for domestic scrap purchases amidst weaker global trends. Towards May-end, H1 scrap was at VND 10,000/kg ($435/t) and H2 grade at VND 9,700/kg ($420/t), falling by VND 1,100/kg ($47/t) m-o-m.