Vietnam: Imported scrap offers fall further amid subdued demand

Vietnam's imported ferrous scrap prices continued the downtrend this week following the global cues and weak demand from steel mills due to limited end-user buying.

After the Kanto tender, the bids of Vietnamese buyers/mills have failed to meet the expectations of suppliers. As Japan's prominent steelmaker, Tokyo Steel, has kept its scrap purchasing bids high, Japanese sellers are unable to accept any bid that is below their offered levels.

Indicative offers of US bulk HMS (80:20) scrap were heard at $410-415/t CFR Vietnam. On the other hand, no firm offers were heard for Japan-origin bulk H2.

Vietnam's steel market overview in Jan-Aug'22

In the first eight months of CY22, the country's economic situation has improved. The index of industrial production (IIP) in August was estimated to increase by 2.9% over the previous month and by 15.6% over y-o-y, of which the processing and manufacturing sector contributed 8.1% to the overall growth, as per the Vietnam Steel Association (VSA).

Vietnam's billet export offers largely firm

Vietnam's blast furance (BF)-grade billet export offers stood at around $530-540/t FOB, largely stable w-o-w. Meanwhile, some industry participants have found domestic prices more attractive. Prices in the domestic market stood at around $550/t exw.

Overview of other SE Asian scrap markets

• Indonesia: Imported scrap offers of Australia-origin PNS were at $407/t, CFR Jakarta and Hong Kong-origin PNS was offered at $433/t, CFR Jakarta basis. Meanwhile, shredded 211 of Australia-origin was offered at $410/t CFR Jakarta.
  
  
• Malaysia: Offers of Australia-origin shredded scrap were assessed at $405/t, CFR Klang and HMS 80:20 at $370/t CFR Penang, respectively.
  
  
• Taiwan: Taiwan's imported scrap prices for US-origin HMS 1&2 (80:20) scrap stood at $360/t, CFR Taichung. Whereas, shredded 211 offers from Australia and New Zealand were at $403/t, CFR Taichung.
  
  

Outlook

Considering the current market scenario, Vietnamese bookings for Japanese scrap are expected to remain limited in the near term amid negative sentiments in its domestic finished steel market.