Vietnam: Imported ferrous scrap offers witness mixed trends amid bid-offer disparity

In Vietnam's imported ferrous scrap market, trading activity was muted due to the widening bid-offer gap. Buyers showed little interest as domestic steel sales declined and demand waned, while sellers remained firm on their prices.

No firm offers for imported cargoes was seen, as suppliers had limited July loading stock and were not ready to negotiate August loads. Indicative prices stayed at $395-400/t CFR for US-origin HMS(80:20) bulk, while buyers held firm at around $380/t CFR.

Japanese H2 and Hong Kong grade A/B (50:50) were available at around $365/t CFR, causing Vietnamese buyers to sideline deep-sea bulk scrap purchases.

Assessment trends: US bulk HMS (80:20) was assessed at approximately $382/t CFR Vietnam, showing a marginal decrease of $2/t w-o-w. On the other hand, Japanese H2 scrap prices experienced a slight incline, with BigMint's assessment ranging between $370/t CFR Vietnam, up $1/t w-o-w.

At the start of the week, a deal was reportedly concluded at approximately $365/t CFR, but following the Kanto tender conclusion, buyers' asking prices fell, and tradable values were heard at $360/t CFR. In this month's Kanto export tender, a shipment with 10,000 t of H2 scrap was destined for a Vietnam-based buyer at JPY 51,510/t FAS Japan.

The firm workable levels for H2 grade dropped to $365 from $370/t CFR Vietnam the previous week as an H2 grade deal was secured at $365/t CFR Vietnam, and the seller's tradable levels and indicative bids remained at $360-362/t CFR Vietnam.

Domestic updates: Vietnamese mills faced challenges from cheaper Chinese materials and reduced demand during the monsoon season. With domestic billet prices at $480-490/t, imported scrap was less attractive, prompting mills to wait for further price drops.

Vietnam's largest steelmaker, Formosa Ha Tinh, has cut its HRC prices due to low demand during the construction off-season. As of last week prices for non-skin pass SAE1006 and SS400 pipe-making products are $560-572/t CIF, depending on order size. Orders of 20,000 t or more are priced at $560/t CIF, down from $575-605/t CIF on 20 May. Smaller orders range from $563/t to $572/t CIF. SAE1006 skinpass offers are $570-580/t CIF, $30/t lower than on 10 May. All offers are for the August shipment. This is Formosa's second consecutive price reduction. Despite the drop, it may take time to secure orders. Chinese HRC offers in Vietnam have also decreased due to falling iron ore prices.

Outlook: Overall, the Vietnamese scrap market continues to witness dull demand especially due to the upcoming monsoon season which will impact steel consumption in infrastructure.