Vietnam: Imported ferrous scrap buyers cautious in subdued market

The imported ferrous scrap market in Vietnam remains subdued due to the cautious approach from major buyers. Market participants attributed the increase in deep-sea bulk prices to stronger Turkish and South Asian import markets. They have also suggested that a large mill might bid at the $380/t level, as Japanese-origin scrap was currently expensive, making premium quality deep-sea scrap an attractive option at a similar price level.

However, caution is advised as expectations for sustained high prices should be tempered, considering the possibility of a decrease after the completion of September bookings.

An indicative bid of $380/t CFR Vietnam for HMS (80:20) bulk was heard for a US-origin cargo. Despite these, the Vietnamese scrap market remained relatively subdued. A Japanese trader noted that the acceptable buying price for H2 grade scrap in Vietnam was still at $375/t CFR.

Domestic market overview

Vietnamese mills expressed concerns about profitability. The production cost for converting scrap into billets would result in losses at the $380-$385/t CFR price range, they mentioned.

Bid prices in Vietnam stood at VND 9,100-9,400/kg ($380-393/t) for delivery to a northern region mill, excluding VAT, according to market sources.

In contrast, markets in Thailand remained at the same level as earlier, as no firm offers were heard for US-origin bulk HMS (70:30). Yet, Australian HMS and shredded deals were heard concluded at $388/t and $408/t recently.

First Vietnamese steel maker receives international certificate on environment: POSCO Yamato Vina Steel Joint Stock Company has achieved a significant milestone as the inaugural steel manufacturer in Vietnam is to be officially granted the international EPD (Environmental Product Declaration) certificate.

On a different note, the industrial production index (IIP) in Hanoi demonstrated modest growth, increasing by a mere 2.3% y-o-y in the first half of 2023. This presents a considerable challenge for the city to attain its targeted IIP growth of 7.5 - 8% for the year.

Throughout the first half of the year, various sectors in processing and manufacturing experienced expansion compared to the corresponding period last year (CPLY). Notably, sectors such as beverages saw a growth of 24.5%, pharmaceuticals, and medicinal materials observed a rise of 17.4%, and products crafted from cast metals recorded a 9.9% increase.

Outlook: As per participants in the market, buyers will wait till the end of September to observe the export prices from Japan. If prices comeg to a negotiable level, there might be chances of further procurements. Or else, Vietnam will start sourcing from other origins as per price viability.