Vietnam: Weak steel demand weighs on imported scrap prices

Vietnam's demand for imported scrap was suppressed due to muted steel demand from the infrastructure and construction sectors, bid-offer disparity, and price competitiveness of local scrap over imports.

The major steel mills are all procuring material from domestic sources as imported scrap prices are still too high and not workable. There was no buying mood in Vietnam as buyers expect that prices still have scope to decline further in the near term.

Prolonged inflation and high interest rates have put pressure on the real estate industry and demand for finished products for the construction industry is slow. As a result, steelmakers have curbed finished steel production in the domestic market.

• Offers for Japanese bulk H2 scrap stood at $445-450/t CFR Vietnam, down $2-3/t w-o-w. Bids for H2 are hovering around $435-445/t CFR Vietnam.
  
  
• Bulk offers for US-origin HMS 1&2 (80:20) were heard at $455-460/t CFR. Buyers are yet to resume bulk cargo bookings.
  
  

Vietnam's billet export offers: Vietnam's BF-grade billet export offers remained stable at $630/t FOB this week as finished steel demand after the Tet holidays was not adequate. However, prices remained largely supportive following an uptrend in Chinese rebar futures.

Overview of other South Asian scrap markets

• Thailand: Thailand's scrap prices for Central American shredded material are at $425-430/t CFR, while HMS (70:30) was offered at $390-400/t CFR LCB.
  
  
• Indonesia: Offers for Hong Kong-origin imported HMS (90:10) scrap were heard at $425/t CFR JKT, while PNS was quoted at $435/t CFR JKT. Prices have fallen due to limited demand.