Vietnam: Imported bulk scrap offers drop by up to 3/t w-o-w; buyers inactive due to weak domestic steel market

• Weak demand persists; market remains in wait-and-see mode
  
  

• Japanese H2 offers firm, but buyers hesitant due to freight
  
  

In Vietnam, imported scrap demand did not improve last week, while local producers expected reduced offers for long products amid poor construction activity.

"Vietnamese producers have huge stocks of longs due to weak sales. So, they are not interested in scrap," a source in Vietnam said.

Despite slow demand, Japanese H2 scrap was still offered at $335/t CFR Vietnam as suppliers faced high freight rates, although buyers quoted below $330/t CFR.

For US-origin bulk HMS (80:20) scrap, Vietnamese mills were not ready to pay more than $352-355/t CFR, while the material was available at around $360-365/t CFR.

In Vietnam, HS offers dropped to $355-$360/t CFR, with bids around $350/t.

CFR assessments

• Deep-sea bulk US cargoes of HMS (80:20) stood at $358/t, down by $2/t w-o-w.
  
  
• Japanese-origin H2, a major tradable grade in Vietnam's scrap market, was at $330/t, down by $3/t w-o-w.
  
  

Market scenario

Buyers are avoiding deep-sea cargoes due to high volumes and risks. More competitive options include cheaper scrap from Japan, Singapore, and the Philippines, along with HMS (80:20) containers from the US, South Africa, and South America. Trading in deep-sea cargoes remains quiet with limited offers and bids.

"Normally, scrap prices rise in winter, but this year, demand is weak. CFR Taiwan prices are nearing Vietnam's, and Turkiye is lowering its buying price. H2 prices are still supported by high freight rates, but buyers are reluctant to accept the elevated prices," said a trader.

"Many vessels are entering Tokyo Bay, which is tightening cargo bookings. H2 prices are not dropping because mills in the Kanto area can't lower their buying prices, so overseas deals are hard to make," informed a Japanese trading source.

"It's a very slow market in Vietnam; no H2 deals have been heard. It's very quiet," added a Vietnam-based mill source.

In the domestic market, a northern mill lowered scrap purchasing prices by VND 150/kg ($6/t) to VND 8,550/kg ($337/t) DDP for the H1 grade last weekend. This follows a previous week's decrease of VND 100-200/kg ($4-8/t).

Additionally, offers for long products saw declines: rebar dropped by VND 250/kg ($10/t), while wire rods fell by VND 200/kg ($8/t). A representative from a Vietnamese trading company stated, "We anticipated the drop due to continued low sales activity."

Outlook: The market is currently in a wait-and-see phase, with the upcoming Kantor tender significantly influencing sentiment, as per market insiders.