Vietnam: Imported ferrous scrap offers drop by up to $8/t w-o-w amid bid-offer disparity

Vietnamese imported scrap offers witnessed a downturn this week after the conclusion of the recent Japanese H2 scrap Kanto tender. Moreover, subdued demand in the domestic market, coupled with bid-offer disparity, have led buyers to adopt a cautious stance of observation.

Despite expectations for increased activity following the Lunar New Year holidays, there has been a delay due to bid-offer disparity.

Scrap buyers have re-entered the market with a necessity to replenish their stocks. However, given the slow-rising prices for intermediate and finished steel, they are seeking to acquire raw materials at lower costs, as noted by a trader based in Vietnam.

• Japanese H2 scrap offers were reportedly in the range of $380-385/t CFR Vietnam, whereas buyers were aiming for $375/t CFR Vietnam.
  
  
• US bulk HMS (80:20) offers were heard at $390-395/t CFR Vietnam, while those from Australia were around $385/t CFR.
  
  

The recent Japanese H2 scrap Kanto tender, comprising approximately 5,000 t, was reported to have been awarded to a Vietnamese buyer. The price of this tender was approximately JPY 50,100/t ($340/t) on a FAS basis, representing a notable decrease of JPY 2,987/t ($20/t) compared to the previous month.

Domestic market: In Vietnam, domestic scrap prices dropped slightly amid a subdued market. Domestic type 1 or H2-equivalent 3-6 mm scrap prices in northern Vietnam stood at around VND 9,200-9,500/t ($374-386/t). Meanwhile, prices of the same grade in the southern region saw a slight decline to VND 8,800-8,900/t, as reported by several mills and trader sources.

Steel market updates: According to market sources, Formosa Ha Tinh, Vietnam's prominent steel mill, has reportedly reduced prices for HRC deliveries slated for May-June 2024. Subsequently, another steel mill, Hoa Phat, has recently lowered prices for rebar. However, the precise extent of these reductions could not be verified at the time of publishing the report.

Outlook

Imported scrap offers are expected to undergo slight corrections in the upcoming week, primarily influenced by lower bids from Vietnamese buyers and the absence of other key importers such as South Korea and Taiwan for Japanese scrap.