Vietnam: Imported bulk ferrous scrap index declines by up to $7/t w-o-w; dull interest from steelmakers

Vietnam's imported bulk ferrous scrap index declined sharply by up to $7/t w-o-w, as mills remained hesitant to bid while awaiting clearer signals and healthier inquiries from the downstream steel sector.

According to a representative from a major trading house, Vietnamese buyers are currently uninterested in Japanese scrap, focusing instead on cargoes from Hong Kong, South Korea, and Russia.

Japanese suppliers are showing reduced interest due to bid-offer disparities and ongoing holiday periods. Offers for H2 bulk scrap into Vietnam were around $370/t, while bids were around $360/t, creating a $10/t gap. This discrepancy, combined with expectations of further yen appreciation, has diminished the appeal of Japanese scrap.

Another buyer reported that Vietnam's pricing remained unappealing, with a current $10-12/t gap between offers and bids.

Offers for Japanese H2 scrap remained slightly higher at $370-$372/t CFR Vietnam. For the H1/H2 (50:50) grade, offers were reported at $370-372/t CFR Taiwan, although no bids have been received from Taiwan. Vietnamese mills have indicated H2 prices at $360/t CFR.

Australian bulk offers were slightly lower at $384-385/t, but Vietnamese market participants are only willing to pay up to $377-378/t, considering the softening US origin bulk scrap deal prices in Turkey.

A market insider noted that only a few Japanese suppliers have been active recently, likely due to the upcoming summer holidays and expectations of further yen recovery. Offers for Japanese H2 scrap were assessed at $366-372/t CFR Vietnam, while buyers' bids were around $335-360/t CFR.

Assessments

Weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam stood at $375/t, down by $7/t w-o-w.

Weekly assessment for Japanese-origin H2, a major tradable grade in Vietnam's scrap market, down by $5/t to $366/t CFR.

The European Commission (EC) has launched an anti-dumping (AD) investigation into HRC imports from Egypt, India, Japan, and Vietnam, following a 24 June petition by Eurofer. The investigation covers 1 April 2023, to 31 March 2024, with Vietnam's case involving comparisons of export prices against costs of production. Eurofer's complaint cited increased imports from these countries, impacting domestic producers' volumes, prices, and overall performance.

Vietnam is among the major suppliers under a 15% residual quota, which they have nearly exhausted since 1 July. India has a specific HRC quota, with 75% utilised. A final decision on the investigation is expected within 12 to 14 months, with provisional duties possible in 7 to 8 months. Current tariff-rate quotas expire on 1 July 2026.

Outlook

Vietnam's deep-sea scrap bookings from Japan are expected to slow down during the summer due to ongoing bid-offer discrepancies. Meanwhile, buyers are actively exploring alternative sources, such as Hong Kong and other East Asian suppliers, to meet their generic needs.