Vietnam: Imported bulk scrap offers rise despite weak domestic construction activity
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- Weak finished steel demand keeps domestic rebar prices steady
- Inventory restocking likely ahead of the new year nears
Imported ferrous scrap prices from Japan have risen by approximately $6/t in the Vietnamese market, while offers for US scrap have also increased by $6/t.
However, overall demand in Vietnam's import scrap market has declined due to weakness in the finished products market. Nonetheless, Japanese scrap suppliers have raised prices slightly because of currency fluctuations.
According to market sources, H2 scrap offers to Vietnam were reported at $345-350/t CFR, up $6/t w-o-w. Exporters of Japanese raw materials experienced increased activity in Taiwan, where the workable price for H2 scrap was approximately $335/t CFR. The difference between offers and bids was at least $15/t.
A market insider commented, "The mills here are well-stocked now. Also heard that 30,000 t of previously booked Indonesian billets have arrived at a Vietnamese port this week,"
"Buying activity has been stable in Vietnam, with some mills looking to restock inventory ahead of the new year," he added.
US-origin deep-sea bulk HMS (80:20) cargo offers were at $375/t CFR, witnessed least interest as bids were heard at $365/t CFR.
Australian offers for deep-sea bulk HMS (80:20) cargoes remained at $370/t CFR Vietnam. Bids for open-origin material were around $350-355/t, with one seller quoting $362-364/t. Weak demand and the gap between bids and offers led to fewer cargo options, as mills showed limited interest in purchasing larger volumes considering deep-sea cargoes as much too expensive.
H2 scrap export offers to Vietnam increased w-o-w, primarily due to recent deals in Taiwan where mills favoured competitively-priced Japanese scrap. Additionally, limited interest in deep-sea cargoes in Vietnam restricted buyer options, contributing to the upward pressure on prices.
Offers for Japanese H2 scrap ranged from $345-355/t CFR, while bids were lower at $330-340/t CFR. This indicates limited demand for higher-priced material especially considering freight costs of about $30-35/t.
In terms of FOB pricing, Japan's H2 scrap export offers rose by JPY 2,200/t ($14/t) to JPY 46,200/t ($304/t) FOB Tokyo Bay, up from JPY 44,000/t ($291/t).
Assessments
- Weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam stood at $372/t, up by $6/t w-o-w.
- Weekly assessment for Japanese-origin H2, a major tradable grade in Vietnam's scrap market, was at $350/t CFR up by $6/t w-o-w.
A representative of a Vietnamese mill reported that offers for heavy scrap (HS) were around $365-$370/t CFR Vietnam and bids were at around $355/t.
Domestic Market
Vietnamese producer VAS announced domestic scrap buy prices at VND 8,300/kg ($327/t) for H2 grade and VND 8,450/kg ($333/t) for H1 grade. After a prior increase, prices for long products have stabilised, with wire rod at VND 13,700-13,800/kg ($540-544/t) and rebar at VND 13,500-13,600/kg ($532-536/t), as construction activity slowed unexpectedly.
Vietnam's steel industry faces challenges from rising Chinese exports and global protectionism. Australia and Thailand initiated anti-dumping investigations into Vietnamese steel. Concerns about Chinese steel flooding the market have increased, with imports nearly doubling in the past two years.
Vietnam plans to inject 20.695 trillion dong (about $815 million) into Vietcombank, its largest state-owned bank, to strengthen its capacity to support government policies.
Outlook: Market insiders indicate that imported scrap prices may decline slightly in the coming weeks, but strong demand in the coming year should mitigate this drop. Australia is investigating potential dumping of hot-rolled steel bars from various countries, including Vietnam, while Thailand is probing cold-rolled stainless steel imports from Vietnam. As a result, the Vietnam Steel Association faces a rising number of global trade defense investigations, complicating market demand.
