Vietnam: Imported scrap trade yet to pick up on weak finished steel demand

Finished steel demand remained weak in Vietnam. Hence, scrap buyers are less likely to book any fresh material from the US or Japan despite the fact that offers have dropped, recently.

Vietnam's steel mills showed less interest in scrap bookings due to weak end-user demand. Buyers were unwilling to raise their bids due to continued weakness in the country's downstream demand for finished steel products specifically for rebars as prices remain more or less unchanged, according to market sources.

Offers for US-origin bulk HMS 1&2 (80:20) were heard at $390/t CFR Vietnam, up by $10/t w-o-w. However, deals remained absent as suppliers may raise their offers further due to low availability of scrap.

Offers for the Japanese material continued to decline throughout the month after the Kanto tender concluded at lower bids. Fresh H2 offers are at $380/t CFR levels. However, buyers are looking for workable price levels, and bid prices remain lower by $10-15/t levels at $365-370/t CFR.

Suppliers in Japan are hopeful for higher prices and better realisations in the near term amid slow scrap collections.

The Vietnam government has been pushing for more infrastructure projects, which may improve finished steel demand in the near term.

Production and sales of steel products:

• Finished steel production reached 2.174 mnt in April'23, down by 9.66% m-o-m compared to March 2023 and down 26.3% y-o-y over the same period in 2022.
  
  
• Sales of all kinds of steel reached 2,032 mnt in April'23, down by 8.32 % m-o-m over the previous month and down 15.1% y-o-y over the same period.
  
  

Further, Thailand, another emerging Southeast Asian scrap buyer, has witnessed silence after the election result was announced. Major buyers like TATA, SYS, and G-Steel are out of the market. Buyers are waiting for a clear market direction.