Vietnam: Imported bulk scrap offers rise $3/t w-o-w; buyers show weak response

Vietnam's imported ferrous scrap offers continue to rise by up to $3/t w-o-w whereas no major buyer is accepting such high prices. Vietnamese traders commented that the H2 price levels around $362-365/t are reasonable for buyers, although they are bidding for $360/t.

Other market participants noted that workable levels for Japanese H1/H2 bulk scrap were unchanged at $365-367/t CFR but attracted no interest as bids are still at $362/t. Sellers of Japan-origin scrap offered Vietnam $368/t CFR for H2 grade. Similarly, HS-grade scrap prices increased as offers to Vietnam and Taiwan surged due to a strengthening of the JPY and supply shortage. HS scrap from Japan was offered at $395-398/t CFR.

A Japanese trader noted that with low Japanese supply due to hot weather and slow scrap collection, some shippers might shift to local mills and those who are offering are adding the premium charge due to shortage of scrap.

Buyers' tradable price for US-origin HMS (80:20) scrap was $377-378/t CFR but offers remain higher by $3-5/t up to $385-386/t.

Assessments:

Weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam stood at $386/t, an increase of $3/t w-o-w.

Weekly assessment for Japanese-origin H2, a major tradable grade in Vietnam's scrap market, rose by $3/t to $368/t CFR.

Domestic market: During the first half of the week, domestic Type 1 scrap (3-6mm thickness) in Vietnam received bids at VND 9,300-9,500/kg delivered to mills in the northern region and VND 8,400/kg delivered to mills in the south, excluding VAT. In the second half of the week, the bid price firmed at VND 9,500/kg for northern region-based mills and VND 8,600/kg (excluding VAT) for those in the southern region.

In Vietnam, VAT-inclusive offers for Q195 HRC were $517/t CFR during the last mid-week, up from last week's $515/t CFR, with Q235 coils at $522/t CFR, up $7/t w-o-w, and SAE1006 HRC at $540/t CFR, up $5/t. A 30,000 t Q195 coils deal was completed at $516/t CFR. Japanese mills matched Chinese SAE1006 HRC offers at $540-550/t CFR, to lower prices to compete in the SEA region.

Chinese HRC export prices remained stable over the week, with first-tier and second-tier mills keeping SS400 HRC at $515-520/t FOB and $505-510/t FOB, respectively, due to minimal changes in futures and the anticipation of supportive policies from the Third Plenum in Beijing. Non-VAT customs investigations continue, restricting non-VAT exports.

Outlook

Vietnam's deep-sea scrap import market is expected to see some downturn as further rise might not be favourable for current market sentiment. Moreover, the near-term market trend is expected to see some recovery in the domestic finished steel segment.