Vietnam: Imported scrap offers rise further, but trade continues to remain weak

Vietnam imported scrap prices moved up sharply for the second straight week after the Kanto tender concluded. However, trade activities were mostly absent throughout the week and demand for semi-finished and finished steel was also subdued.

It has been noticed that buyers’ interest in Japanese material has improved slightly. Meanwhile, some industry participants found domestic prices more attractive.

Indicative offers for Japanese bulk H2 scrap were at $380-390/t CFR Vietnam, moving up sharply by $15-20/t w-o-w.  No firm offers were heard for USA origin bulk HMS.

In the first seven months of 2022, Vietnam’s economic situation has recovered a bit so has the manufacturing industry. However, finished steel production was at 2.25 mnt in July, down 6.19% compared to June 2022 and lower by 12.5% over the same period in 2021.

Sales of all kinds of steel reached 1.99 mnt, down 11.48 % over the previous month and down 12.1 % over the same period last year.

Buyers and steelmakers are currently watching the scrap market situation, however, the domestic steel market is yet to support the upstream sector. Mills are likely to restock inventory ahead of winter season as October-January is the favourable season for the construction sector.

Ferrous scrap imports plunge over 60% in July: Vietnam, South East Asia’s largest buyer of ferrous scrap, recorded imports at 0.18 million tonnes (mnt) in July vis-a-vis 0.48 mnt in June – a significant drop of 63% on a monthly basis. Notably, the country’s ferrous scrap imports touched the lowest in six months in July, as per SteelMint data.

Demand for imported material was dull due to higher finished steel inventories and slow construction activities.

On a yearly basis, the country’s imports fell 73% from 0.66 mnt in July 2021.

Overview of other SE Asian scrap markets

• • Thailand: Indicative offers for South American-origin HMS 1&2 (70:30) were at $320/t CFR Thailand.
  • Indonesia: Imported scrap offers for Australian HMS 1&2 (90:10) and New Zealand origin HMS 1&2 (80:20) are being offered at $405/t and $395/t CFR Jakarta basis. Meanwhile, prices of New Zealand origin shredded material stand at $400/t CFR Jakarta.