Vietnam: Imported bulk scrap offers rise by up to $6/t w-o-w as demand improves

Vietnam's imported ferrous scrap market remained active last week amid recovering demand and better inquiries for overseas materials especially from Japan.

Last week, Japan's Kanto scrap export tender concluded on 10 July 2024. H2 scrap prices rose by JPY 804/t ($5/t) from the previous month, though the USD price fell by $4/t due to yen depreciation, it reached near all-time lows of 161/dollar before stabilising around JPY 158/per dollar by the weekend.

Vietnam secured 14,000 t of H2 scrap at JPY 52,168/t ($323/t), with prices $355-358/t CFR Vietnam. Vietnamese mills showed increased demand last week with slightly improved market conditions, marking Vietnam's second consecutive month (June-July) of tender participation.

Supporting this sentiment, BigMint stats show that Vietnam's ferrous scrap imports rose by 55% in June, reaching 0.43 mnt.

Offers for Japanese H2 were at $365-$370/t CFR, with bids at $360-$362/t. Japanese H1/H2 bulk scrap with offers at $360/t CFR remains supportive in the Vietnamese market amid improving demand.

As per suppliers, Vietnamese demand is recovering, but South Korea remained out of the seaborne H2 market due to surplus and seasonal off-demand periods.

In other grades such as HS-grade scrap, prices rose following several deals to Vietnam and a bid from the South Korean mill POSCO.

The deep-sea bulk market stayed quiet, but offer levels rose, with HMS (80:20) at $386-388/t CFR Vietnam, and Japanese bulk H2 scrap up to around $364-366/t CFR.

Assessments:

• Weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam narrowed to $383/t, an increase of $6/t w-o-w
  
  
• Weekly assessment for Japanese-origin H2, a major tradable grade in Vietnam's scrap market, rose by $3/t to $365/t CFR, with workable levels still at $360-361/t levels.
  
  

Vietnamese steel major Formosa Ha Tinh (FHS) has maintained HRC prices for September 2024 shipments at $570-580/t CIF Ho Chi Minh City (HCMC) for SAE1006 skin pass, and $560-572/t CIF for non-skin pass, varying by booked volumes. This decision reflects weak market conditions and reduced Chinese HRC prices.

This decision comes comes due to a weakened market influenced by lower Chinese HRC prices. Chinese HRC export offers to Vietnam decreased by $5/t to $525-530/t CFR HCMC, with recent transactions settling at $525/t for August shipments. Hoa Phat reduced non-skin pass HRC prices by approximately $10/t for August and September sales at $555/t in the southern region. Additionally, Baosteel adjusted August prices downward by RMB 100/t ($14/t) due to decreased SHFE HRC futures and subdued global demand. Market participants remain cautious amidst these developments, as SHFE HRC futures declining to RMB 3,708/t ($510/t) w-o-w.

Outlook

Vietnam's deep-sea scrap import market is expected to remain firm amid renewed mill activity for fresh scrap bookings. Moreover, near-term prospects suggest a recovery in domestic finished steel sales, further supporting market stability.