Vietnam: Imported ferrous scrap prices fall by up to $3/t w-o-w on weak demand

• Domestic scrap prices in Vietnam remain stable
  
  
• Steel mills are buying less scrap, preferring billets
  
  

The ferrous scrap domestic market in Vietnam has shown a stabilised trend, although deep-sea origin steel scrap imports experienced a slight softening.

This decline in prices can be attributed to several factors. Firstly, despite fewer offers being heard during the week, suppliers have been cautious in their pricing strategies due to the decreased overall demand for scrap in Vietnam. This reduced demand has been influenced by Vietnamese steel mills opting to purchase more billets instead of scrap, driven by a prolonged decline in billet prices in the region.

Weekly assessment for deep-sea bulk US cargoes of HMS (80:20), CFR Vietnam, narrowed downward to $378/t, a decrease of $2/t from previous weeks.

Japanese-origin H2 scrap prices, a major tradable grade in Vietnam's scrap market, declined by $3/t to $363/t CFR Vietnam. A dormant demand for Japanese scrap at current price levels, despite the overall softer market conditions.

Moreover, the market for containerised HMS (80:20) remained relatively stable at $350-355/t, indicating a more consistent pricing trend in this segment compared to bulk cargoes.

Vietnamese domestic scrap market: On the domestic front, scrap prices within Vietnam remained stable w-o-w, with weak downstream demand keeping market participants cautious. Type 1 or H2-equivalent 3-6 mm scrap prices in northern Vietnam saw a minor increase to VND 9,250-9,600/kg ($363-$377/t), while prices in the southern region held steady at VND 9,000-9,100/kg. Market sentiment leaned towards an expectation of price declines, mirroring trends in seaborne markets.

Additionally, trades heard from Hong Kong-origin in 50:50 grade scrap at around $350-355/t CFR Vietnam, marking a recent low in the market, though offer levels remained slightly higher at $360/t CFR. This suggests competitive pricing dynamics amidst cautious buying behaviour from northern Vietnamese mills.

As per market insiders, currently, domestic scrap prices remain steady, but there is a noticeable decline in import prices. Downstream prices have dropped in the northern region, whereas the southern region has seen minimal change. Flat steel prices have also been impacted by reduced Chinese prices.

Outlook: The market for deep-sea scrap imports into Vietnam shows slight price softening but remains relatively steady overall. The upcoming monsoon season is expected to impact near-term scrap consumption and imported scrap volumes.