Vietnam: Imported ferrous scrap prices fall w-o-w in response to weak steel sector sentiments

The Vietnamese imported scrap market remained slow, with bearish trends prevailing. Offers from Japan and the US edged down due to weak sentiments in the steel market. Many mills had already finished restocking in previous weeks and were adopting a passive approach, as the steel market showed signs of softening.

According to buyers, imported scrap prices are not feasible currently. Mills are showing a preference for domestic scrap and short-sea bulk materials. While there may be some m-o-m growth due to government construction projects, week-on-week changes aren't expected, as the private sector's demand doesn't seem to be improving.

Buying appetite remained limited due to minimal restocking, while offer prices significantly exceeded what buyers were willing to pay. As per market participants, demand and prices remained weak, while no buying interest was seen in Vietnam and other countries like South Korea.

Offers and bids-

• Offers for HMS (80:20) grade scrap ranged from $385-$390/t CFR Vietnam, while bids varied from $375-$380/t CFR.
  
  
• Japanese H2 scrap offers were in the range of $390/t to $395/t. The bid price for H2 scrap remained around $370-375/t, and the maximum workable prices were about $380-382/t with negotiable terms due to weaker market sentiments.
  
  

Domestic market:

In the domestic market, scrap prices in Vietnam fell during the week driven by a weak downstream market and bearish sentiments. In the northern region, domestic Type 1 (3-6 mm) scrap fell by VND150/kg to VND 9,300-9,450/kg. Meanwhile, in the southern region, bid prices remained stable at VND 8,700-8,800/kg. A mill source informed that there were no significant changes in supply and demand fundamentals, but the downstream market performed poorly, impacting raw material prices. A reduction in production capacity in November and cautious approach by buyers are also expected to impact market conditions.

The State Bank of Vietnam maintained its reference rate at VND 24,089, and the black market rate was VND 24,620. The US dollar gained over the dong by 3.79% since the beginning of the year.

Vietnam's auto sales in September showed a slight increase in demand, reaching 25,375 units, but still down 24% y-o-y. Sales in the first nine months dropped 29% y-o-y to 209,929 units.

Outlook: The outlook for the Vietnamese imported scrap market in the coming days appears to be marked by more sluggishness, primarily due to a weaker finished steel sector and no immediate signs of improvement.