Vietnam: Imported scrap trade slow; domestic steel demand yet to improve

Vietnam’s imported scrap buyers and steel mills remained less active throughout the week due to less demand for finished long products in the domestic as well as overseas markets. In addition, some mills have cut their production and are running at 50% capacity, SteelMint learnt.

• Indicative offers for the US-origin bulk HMS 1&2 (80:20) were at $370/t.
• Indicative offers for Japanese bulk H2 to Vietnam heard around $385/t levels, inching down by $5/t w-o-w. However, after the recent Kanto tender result, many people estimated that offers may increase further as the bid prices are higher than the expectations.

Around 10,000 t of scrap were awarded and the average price for H2 scrap stood at around JPY 49,865/t ($341/t) FAS at Japan’s bellwether Kanto Tetsugen scrap export tender, SteelMint learnt from sources. The Kanto tender bid fell by $8/t on weak buying sentiment. Prices fell by JPY 1,175/t ($8/t) from JPY 51,040/t ($357/t) in September.

Prices moved down in the absence of bids from buyers, but these are still higher than expectations. Sources revealed that one of the bulk cargos was booked by a South Korean mill in alliance with buyers from Vietnam, Taiwan, and other nations.

Factors behind subdued market sentiments-

• Vietnam’s billet export offers fall $15/t w-o-w: Vietnam’s BF-grade billets export offers stood at around $520/t FOB, a w-o-w fall of around $15/t. Falling scrap prices on the back of low movement in the finished steel sector in the region have weighed on billets export offers, SteelMint observed.

GDP in the first 9 months (January- September) of 2022 increased by 8.83% over the same period last year, which is the highest increase in 9 months in the period of 2011-2022. Production and business activities have improved and gradually regained momentum.

Outlook: Imported scrap trade is likely to remain subdued till the domestic market improves. Meanwhile, buyers are now looking for further discounts in offer prices. However, suppliers had less interest to quote lower levels and opted to hold fresh offers for clear market direction.