Vietnam: Imported scrap trade yet to pick up despite offers falling to 1.5 year-low

Imported scrap prices to Vietnam have fallen further to around the lowest level in 1.5 years. However, trade activities are yet to improve. Limited demand for semi-finished and finished steel in domestic and overseas markets remained the major factor behind limited trade. Meanwhile, domestic material is available at more competitive price levels.

Fresh offers for Japanese H2 bulk cargoes were at $390/t CFR, down by $15/t w-o-w, while buyers were bidding comparatively lower by $25-30/t. The depreciation of the Japanese yen against the USD has continued to impact scrap offers.

In contrast, USA-origin HMS 1&2 (80:20) was offered at $355-360/t CFR Hai Phong, while the same grade was quoted at $365/t CFR Ho Chi Minh City. Buyers are not showing much interest in booking fresh overseas cargoes.

Though imported scrap offers have fallen significantly, steel mills and buyers preferred to procure domestic material. Heavy rainfall and slow construction activities may lead to slow procurement of imported scrap. Hence, offers are likely to fall further, SteelMint understands.

Domestic scrap prices in Vietnam fall further

Procurement prices for domestic scrap have come down significantly on low demand from end-users. Domestic H1 and H2 grades are at VND 9,500/kg ($413/t) and VND 9,200/kg ($400/t), respectively, falling by VND 500/kg ($21/t) w-o-w. Additionally, scrap prices in South Vietnam (Ho Chi Minh City) are at VND 8,800/kg ($382/t) for H1 and VND 8,500/kg ($370/t) for H2 grade.

Vietnam's billet export offers edge down w-o-w: Vietnam's BF-grade billet export offers stood at around $540-550/t FOB, a w-o-w decrease of around $15/t. However, no significant deals were heard concluded at current offers.

Overview of other SE Asian scrap markets

• • Thailand: SteelMint's assessment for Central America-origin HMS 1&2 (70:30) was assessed at $333/t CFR Thailand, up $8 w-o-w, tracking the hike in Turkish prices.
    
    
  • Indonesia: Imported scrap offers for the most preferred oversized PNS from New Zealand were at $460/t CFR Jakarta, whereas shredded scrap of UK origin was at $415-420/t CFR Jakarta.