Vietnam: Imported ferrous scrap prices drop to 2-year low amid weak steel demand

In Vietnam, prices of imported ferrous scrap, especially from Japan, touched nearly a 2-year low after dropping by $5-7/t w-o-w due to weak regional demand and falling prices for other steelmaking raw materials.

The imported ferrous scrap market remained quiet this week. Limited offers were heard from Australia, while US offers for bulk HMS(80:20) fell to $360-365/t CFR Vietnam, down from $370/t in recent weeks. Vietnamese market participants noted that the maximum workable price for Japanese H2 scrap from buyers has narrowed to $350-355/t CFR Vietnam, compared to $360-365/t previously.

In response to the downtrend, some Vietnamese traders have refrained from making offers and are monitoring the market closely.

A Vietnam-based buyer commented,"We are aiming to secure HS locally at better prices, at around $370/t, compared to imported from Japan which is at $380-385/t."

HS offers remained stable at $380/t CFR Vietnam and $373/t CFR Taiwan. However, traders reported that sellers might accept as low as $375/t CFR Vietnam. Competitive HS offers were noted at $373/t CFR Vietnam and $365/t CFR Taiwan, with a bid at $365/t CFR Vietnam.

Recent price cuts have affected spot seaborne pricing and FAS HS yen-denominated collection prices, according to market participants.

H2 scrap offers this week were at $355-360/t, with bids decreasing to $342-345/t, both down by $5-8/t from the previous week.

Assessments

• Weekly assessment for deep-sea bulk US cargoes of HMS (80:20) CFR Vietnam stood at $364/t, down by $7/t w-o-w.
  
  
• Weekly assessment for Japanese-origin H2, a major tradable grade in Vietnam's scrap market, was down by $7/t to $353/t CFR.
  
  

Vietnam's domestic scrap prices remained steady amid slightly muted demand. Type 1 or H2-equivalent 3-6 mm scrap in northern Vietnam was stable at Dong 9,500/kg ($375-380/t), while in the southern region, prices for the same grade held at Dong 8,500-8,950/kg, according to market participants.

Domestic demand has softened, and billet makers are facing losses, leading to downward pressure on scrap prices.

A Vietnam-based trader noted,"Domestic scrap prices remain higher than import, making a near-term increase unlikely." Additionally, sources suggest that new government construction projects are unlikely in the short term, with investments expected to ramp up closer to the 2026 election year.

As per market insiders, while steel demand in Vietnam has stabilised, declining international prices have eroded market confidence. Sharp drops in iron ore, coking coal, and billet prices from China during the week further pressured scrap prices.

Outlook

Market participants feel a recovery in scrap demand is unlikely in the near term. Mills are currently hesitant to resume scrap purchases, waiting for more favourable market trends before committing to any deals.