Vietnam: Imported ferrous scrap offers downtrend amid limited inquiries

Buyers showed little interest in Vietnam's imported ferrous scrap market as the finished steel segment has not been performing well due to the monsoons and slow construction activities. However, some market participants said the current supply conditions would likely limit any further price declines. The scrap market is rigid due to low collection levels. There is not much room for prices to keep going down.

Seaborne spot market liquidity for Japanese H2 grade remained thin, with buyers from Taiwan, Vietnam, and South Korea staying on the sidelines despite stable offers. Vietnamese traders reported that the export market in East and Southeast Asia has become challenging, with buyers focusing on domestic scrap due to weak demand and prices. Firm offers for H2 grade were at $365-$370/t CFR Vietnam unchanged from last week. Buyer indications for H2 grade were at $360/t CFR Vietnam. Sellers were quiet, noting that August shipments are still far off, and most July cargoes have already been sold.

Deals for HS grade scrap were reported at $390-$395/t CFR Vietnam for 5,000 t and 8,000-10,000 t cargoes. Offers were at $398-$400/t, while bids ranged from $390-$393/t CFR Vietnam as of last week.

Assessment trends: US bulk HMS (80:20) was assessed at approximately $380/t CFR Vietnam, showing a marginal decrease of $2/t w-o-w. On the other hand, Japanese H2 scrap prices experienced a drop of $4/t w-o-w, with BigMint's assessment standing at $366/t CFR Vietnam.

Vietnam dumping probe into coated steel imports: Vietnam has initiated an anti-dumping (AD) investigation into coated steel imports from China and South Korea, prompted by a complaint from local producers. The Ministry of Industry and Trade (MoIT) announced the investigation's commencement on 14 June, effective immediately. The investigation will assess dumping behaviour from 1 April, 2023 to 31 March, 2024, covering 42 types of products across various HS codes. Interested parties can submit relevant information until 8 September. Local producers, including Hoa Sen Group JSC, Nam Kim Steel JSC, Phuong Nam Steel Company, Ton Dong A JSC, and China Steel & Nippon Steel Vietnam JSC initiated the complaint on 3 May, 2024. Previously, AD measures against galvanized steel from China (3.17-38.34%) and South Korea (7.02-19%) were in place from 2017-2022, but which were subsequently terminated.

Domestic market: During last week, domestic scrap prices in northern Vietnam experienced a decline due to a weakened finished product market and construction delays caused by the rainy season. The prices for type 1 or H2-equivalent 3-6 mm scrap dropped to Dong 9,150-9,500/kg ($361-$375/t). In contrast, prices for the same grade of scrap in southern Vietnam remained stable, hovering at around Dong 9,000/kg.

Impact of rainy season

The ongoing rainy season has significantly impacted local construction projects in Vietnam, causing delays that have contributed to the reduced demand for finished steel products. According to market sources, this has led to a continuous downtrend in the Vietnamese finished products market. A Vietnam-based market insider highlighted that the current conditions are adversely affecting the market, stating, Vietnamese finished products are continuing on a downtrend.

Market sentiments

Overall, market activity in Vietnam remained moderate, with participants noting the persistent downtrend in finished product prices. The combination of weaker market demand and external factors such as weather-induced construction delays continues to pressure the domestic scrap market.