Vietnam: Imported scrap prices under pressure as Covid cases rise

Vietnam's imported scrap market remained dull, owing to sluggish demand from the domestic markets and rise in Covid cases. The upcoming new year holiday this weekend is also dragging imported scrap prices down.

• Fresh offers for bulk Japanese H2 were at $480-485/t CFR Vietnam, falling marginally by $5/t w-o-w.
  
  
• US-origin bulk HMS price indications are assessed at around $500/t CFR Vietnam levels, down by $10-12/t w-o-w.
  
  

Domestic scrap prices overview: H1 and H2 grades are now set at VND 11,400-11,450/Kg ($495-497/t) and VND 11,100/kg ($482/t) levels respectively.

Vietnamese steel mills have also cut their production owing to less demand from domestic and overseas markets. Covid curbs and decline in the Chinese futures market have also influenced Vietnam's domestic market. China's SHFE rebar futures contract for May'22 delivery closed at RMB 4,307/t ($676/t) on 27 Dec'21, witnessing a fall of RMB 212/t ($33/t), d-o-d.

"Increasing Covid cases have pulled down market sentiments further. Hence, demand from end-users also declined," said a market source.

Vietnam reported 15,586 new COVID-19 cases on 24 Dec'21 with the highest cases being seen in the capital city of Hanoi.

Notably, the country's steel mills mostly relied on Chinese market sentiments in order to conclude the billet export deals. However, with the decline in Chinese rebar futures and approaching holidays, bids for imported billets in China also remained subdued.

Vietnam's BF-route billets export offers stood unchanged at $620/t, FOB. No deals were heard concluded this week.

Overview of other South East Asian markets

• Imported scrap offers in Indonesia fall: Imported scrap offers to Indonesia came down with limited trade observed while compared to the preceding week. UK-origin PNS is being quoted at $515/t CFR Jakarta levels, down by $515/t w-o-w.
  
  
• Imorted scrap offers to Thailand inch down: Imported scrap offers to Thailand for HMS 1&2 (80:20) from Central America have dropped marginally to $415-416/t CFR, a drop of $2-3/t CFR Thailand w-o-w.