Vietnam: Imported ferrous scrap prices volatile amid cautious buying sentiment

In the deepsea scrap market in Vietnam, buying activity was noticeably sluggish today among primary buyers, reflecting cautious market sentiment.

Vietnam's domestic scrap market is experiencing notable shifts due to various factors, including rising prices of imported iron scrap, particularly from Japan. Despite increased prices, Vietnamese mills are actively engaged in restocking. South Korean mills have also entered the scene with higher bids; however, these bids are still falling short of sellers' acceptable levels.

A transaction was heard for Japanese H2 scrap concluded at $376-$377/t CFR Vietnam. This deal is considered favourable for buyers. Market participants have indicated that the workable price for H2 scrap among Vietnamese steel mills is in the range of $375-$385/t CFR.

Beyond Vietnam, East Asian scrap markets have experienced modest price increases, with Korea being a notable contributor to this trend. However, certain steel products, such as rebar, have displayed signs of weakness, reflecting a complex market environment.

Domestic market: In the northern region, prices for Type 1 scrap (3-6 mm) remain relatively stable within the range of VND 9,100-9,400/kg ($374-384/t). In contrast, the southern region has seen a more substantial increase, with prices rising by VND 100/kg to 8,800/kg($362/t).

A major blast furnace mill in the northern region has bought domestic HS-grade scrap at $395/t, delivered to factory. This price level is notably lower than offers floated by Japanese traders, which range from JPY 56,500-57,000/t FOB Japan, equivalent to $420-$424/t CFR Vietnam.

Despite the rise in domestic scrap prices, there is a sense of caution in the market. Weakness persists in the downstream rebar market, with limited change in finished steel demand. Some Vietnamese companies have opted to reduce production due to challenging steel market conditions. However, there is positivity as finished products prices stabilise, offering a modestly optimistic outlook for the domestic market.

In recent news, Mexico's Ministry of Economy reported a preliminary decision in the anti-dumping duty (AD) investigation into imports of cold-rolled steel originating in Vietnam.

Outlook: The Vietnamese imported ferrous market is expected to remain fiercely competitive. In the deepsea market segment, buying activities are expected to remain sluggish. This suggests that market participants will need to maintain a cautious approach and employ strategic decision-making.