Vietnam: Imported ferrous scrap offers continue to move northward ahead of Lunar New Year holidays

Imported scrap prices in Vietnam continue to climb as a result of re-stocking ahead of the Lunar New Year holidays. Offers for Japanese H2 scrap have risen by an additional $5/t to $400/t CFR Vietnam, compared to the previous week, had a workable level of $385-390/t CFR. Higher-quality grades from Japan are now available at $422-425/t CFR, witnessed a nominal w-o-w increase.

Vietnamese buyers, aiming to replenish stocks before the Lunar New Year, successfully secured a 5,000-t shipment of H2 scrap from Japan last week, finalising the deal at $395/t CFR Vietnam. Buyers expressed contentment with the current price levels, citing improved margins between scrap and finished steel as a contributing factor to their satisfaction.

Offers and Indicatives:

• Bulk HMS offers from the US ranged between $410-415/t CFR Vietnam, with bids at $392-395/t CFR; market estimates maximum workable prices for buyers at $400/t CFR.
  
  
• Japanese H2 offers increased by around $400-405/t CFR, Vietnam with strengthened JPY; the workable price improved to $390/t.
  
  

Domestic market: Vietnamese steel major, Formosa Ha Tinh, has raised HRC prices by $25-35/t m-o-m for February 2024 shipments, according to the quantity booked. Subsequent to the revision, prices of HRC (SAE1006, skin pass) stood at $625-635/t CIF Ho Chi Minh City. Meanwhile, non-skin pass coils are assessed at around $620-625/t CIF.

Moreover, domestic mills in Vietnam also raised HRC prices. Hoa Phat raised monthly HRC (SAE1006, non-skinpasses) prices for March 2024 sales by $30 m-o-m. Post-revision, effective prices stand at VND 14,680/kg or $600/t CIF HCMC (southern region) against previous price of VND 14,020/kg ($570/t) excluding VAT.

The VN-Index dipped to a three-week low. Vietnam's benchmark VN-Index fell 0.95% to 1,091.88 points Monday, the lowest since last week of November.

Domestic Auto Sector: Vietnam's domestic auto market is witnessing a decline in sales due to subdued customer demand, despite manufacturers' price reductions and promotions during the peak shopping season. Cars under VND1 billion ($40,983) face challenges in sales, attributed to economic difficulties and consumer reluctance to spend on cars. Dealers, facing low sales, may resort to price reductions and incentives to clear inventory. Despite efforts to stimulate sales, car consumption in Vietnam has sharply declined this year. Initiatives like Toyota's 50% registration fee discount aim to revive the market, but the impact remains limited.