Vietnam: Imported scrap prices rise marginally w-o-w; sluggish finished steel demand continues

Vietnamese imported ferrous scrap prices experienced a slight increase this week, following the recent hike in Japanese Kanto scrap export tender bid prices. However, buying interest in the country has remained subdued due to sluggish demand in the longs sector, which has been hindered by weak construction activity.

Suppliers have raised prices in response to lower scrap collection and improved sentiments in the international market. In the recent Kanto tender, Vietnamese buyers refrained from making any significant bookings.

• Offers for US-origin bulk HMS 1&2 (80:20) increased by $15-20/t and currently stand at $410/t CFR Vietnam.
  
  
• Japan-origin H2 bulk scrap offers were reported to be at around $390-395/t CFR, showing a significant hike of $25-30/t w-o-w.
  
  

Nevertheless, Vietnamese mills are still unable to keep up with the high Japanese scrap prices, primarily due to low scrap generation in Japan and sellers refusing to offer any discounts.

Other updates

Vietnam's rebar market: Vietnam's finished steel market is currently experiencing very poor demand, resulting in a recent price decline by Vietnamese dongs (VND) 200/kg. The current prices for finished steel range from VND 13,850-13,950/Kg. Consequently, scrap exporters are facing challenges in concluding deals in Vietnam without reducing prices, and a gloomy outlook is predicted by market participants.

Vietnam's domestic scrap prices down: Additionally, domestic scrap prices in Vietnam have decreased by VND 200/Kg, with H2 scrap priced at VND 8,700/Kg ($378/t) and H1 at VND 9,000/Kg ($391/t). This decline can be attributed to less attractive market activities in the current scenario.

Market players do not foresee any immediate improvement in imported scrap demand due to the depressed condition of the longs sector. Despite prices of rebar and billets in the Vietnamese market remaining stable throughout the week, demand remains weak. Participants have indicated that offers for longs may decline soon, as there is a mild sign of improvement in sales.

Outlook: Vietnamese imported ferrous scrap market appears challenging in the near term. Slow demand in the longs sector, primarily driven by weak construction activity, continues to hamper buying interest. Steel mills are struggling to cope with high Japanese scrap prices. Market participants thus expect a decline in offers for longs in the coming weeks.