Vietnam: Imported bulk scrap offers from US rise by $10/t w-o-w, H2 prices stable

• Mills delay purchases till China's return from holidays
  
  
• Potential restocking demand could support imported scrap prices
  
  

In Vietnam, imported ferrous scrap prices have begun to rise as offers from the US continued to increase by around $10/tonne (t), while Japanese scrap offers have also gone up. Despite this, overall demand in Vietnam remains sluggish.

An imported scrap trader said, "Some mills are waiting till China returns from its one-week holiday period, to make purchases, reflecting a cautious market sentiment. Additionally, domestic scrap supply has tightened following the recent typhoon, prompting speculation that more mills may turn to the seaborne market for their scrap needs."

Other market sources informed that the recent surge in Chinese billet prices could exert upward pressure on imported scrap. However, any anticipated price increases are expected to be driven by market sentiment rather than an actual change in demand-supply dynamics. Offers for Japanese bulk H2 scrap were heard at $330-335/t CFR Vietnam, whereas, in terms of domestic pricing trends, FAS collection prices of H2 grade rose to JPY 37,000-38,000/t, up from JPY 36,000-36,500/t.

A market insider stated, "Vietnam was quiet, but mills should restock soon. Japanese material is currently the most competitive."

In contrast, bulk US-origin HMS (80:20) scrap was offered at $370/t CFR Vietnam, with a significant bid-offer gap of $15-20/t, as bids remained at $350-355/t. US suppliers are focusing their efforts on the Turkish market, where HMS (80:20) prices have recently risen to $384-386/t CFR Turkiye following new deals.

A market insider said: "This week, imported scrap prices in Vietnam experienced a slight increase, though buying interest has remained relatively muted. Industry players are optimistic that Vietnamese mills may soon resume bookings due to increased activity in the longs sector and tightening domestic raw material supplies."

A Vietnam-based buyer commented: "There are signs of potential restocking and increased demand that could support prices in the near term."

Assessments

• Weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam stood at $365/t, up by $10/t w-o-w.
  
  
• Weekly assessment for Japanese-origin H2, a major tradable grade in Vietnam's scrap market, was stable at $335/t CFR.
  
  

Vietnam's domestic market: Domestic scrap prices in Vietnam experienced a slight increase in the first half of the week. In northern Vietnam, Type 1 or H2-equivalent 3-6 mm scrap prices rose to VND 9,200-9,700/kg ($369-$393/t), while those in the southern region increased marginally to VND 8,500/kg. Despite this uptick, overall demand for scrap remains sluggish, with minimal improvement in sales. However, some market participants anticipate a resurgence in restocking activity as the year draws to a close.

Domestic purchasing behaviour varied among mills, with one reducing its prices by VND 100/kg while another raised its prices by VND 200/kg, indicating differing strategies in response to market conditions. Additionally, some Vietnamese mills announced price increases for rebar and wire rods by VND 100-150/kg, effective in the second half of the week.

A representative from a major trading house in Vietnam said: "We have increased our rebar purchases, expecting a rise in demand as construction activities are ramping up. Even the most pessimistic sentiments foresee potential increases in wire rod prices and stability in rebar."

Outlook

Market experts suggest that the anticipated increase in construction demand is driven by the urgent need for infrastructure repairs following the extensive flooding in northern Vietnam in early September. Additionally, emerging signs of potential restocking and increased demand could bolster prices in the near term.