Vietnam: Ferrous scrap imports plunge 70% m-o-m in Jan, rebound likely in Feb

Vietnam’s ferrous scrap imports were recorded at 0.16 million tonnes (mnt) in Jan’22, showing a plunge of 70% m-o-m vis-a-vis 0.54 mnt seen in Dec’21.

USA was the largest supplier followed by Japan and New Zealand, in Jan’22.

On a y-o-y basis, total import volumes were down by 58% from 0.38 mnt in Jan’21.

Vietnam’s imported scrap market remained less active in Dec’21 as mills kept away from making any major bookings. Bearish domestic and overseas steel markets kept demand for imported scrap limited. Vietnamese steel mills also cut production owing to less demand from domestic and overseas markets. Covid curbs and decline in the Chinese futures market also influenced Vietnam’s domestic market.

Affected by the Covid-19 pandemic, many small steel enterprises experienced a sharp decline in profits in the last few months.

On the other hand, slow overseas demand for billets also remained a key factor behind the silence in the scrap market as high inventory of scrap with mills held them back from buying.

Country-wise breakup

• Imports from Japan drop: Vietnam’s scrap imports from Japan saw a downtrend. These were recorded at 0.03 mnt in Jan’22, a steep 79% drop against 0.14 mnt in Dec’21.

Vietnam’s bulk scrap buyers exhibited decreased buying trend owing to the continuous hike in imported scrap prices from Japan and lower bids from buyers, which were not viable for suppliers. Hence, buyers chose to wait for the offers to come down.

• Import volumes from USA decline: A major portion of the volumes originated from USA, at 0.05 mnt, but these fell a sharp 69% m-o-m in January as against 0.16 mnt in December. Buyers stepped back owing to the discrepancies in bids and offers as Vietnam mills showed less interest in booking at higher prices.
• Imports from Hong Kong and Australia fall: Vietnam’s imports from Hong Kong were at 0.02 mnt in Jan’22, witnessing a sharp 50% drop from Dec’21 levels of 0.04 mnt. On the other hand, Australian imports were also down by 92% at 0.01 mnt in Jan’22 as against 0.12 mnt seen in the previous month, SteelMint data showed.

Outlook
Imported scrap volumes in Vietnam are expected to regain momentum in February with easing of lockdown measures and a consequent improvement in domestic and overseas markets.