Vietnam: Imported scrap trade limited ahead of Kanto export tender

Vietnam’s imported scrap market has been mostly quiet over the last couple of weeks. However, small parcel deals continued to happen. Imported scrap prices continued their downtrend. Buyers and steelmakers postponed fresh bookings and were inactive in the market on the back of low movement in the finished steel sector.

Meanwhile, industry participants are waiting for the Kanto tender outcome. Additionally, national holidays in China for the last 10 days have slowed down overseas market activities.

• Imported scrap prices for bulk Japanese H2 are at $380-385/t CFR levels, down w-o-w.
• Offers for bulk US-origin HMS 1 and 2 (80:20) scrap were at $370-375/t CFR, unchanged w-o-w.

Vietnam imported 321,170 t of ferrous scrap in September, up 14% m-o-m as against 280,714 t a month ago, as per data maintained with SteelMint. Japan continued to be the largest exporter at 123,515 t followed by the US and Hong Kong at 67,120 t and 29,908 t, respectively. The country imported 2.95 mnt of scrap in January-September, down 33% compared to the year-ago period.

The steel market has largely remained stable. Vietnam’s BF-grade billets export offers stood unchanged w-o-w at around $535/t FOB. However, falling scrap prices and modest demand for finished steel in the region have weighed on the export market.

Overview of other SE Asian scrap markets

• Indonesia: Imported scrap offers for Australia-origin HMS 1 and 2 (90:10) were at $390-400/t, CFR Jakarta. Australia-origin shredded were at $415/t CFR levels.
• Thailand: Central America-origin HMS 1 and 2 (70:30) was offered at $315-330/t CFR. However, no fresh deals were recorded.
• Taiwan: Taiwan’s imported scrap prices for Australia-origin HMS 1 and 2 (80:20) stood at $350/t CFR Taichung, unchanged w-o-w.

Outlook: The imported scrap market is likely to remain less active for the next couple of days owing to the upcoming monthly Kanto Tetsugen ferrous scrap export tender that has been scheduled for 12 October, sources informed SteelMint. Last month, a total of 15,000 t of H2 scrap was awarded at an average price of JPY 51,040/t ($352/t) FAS. Sources revealed that the entire quantity was booked by a major steel mill in Bangladesh. Overseas buyers are likely to return to the market after the tender concludes.