Vietnam: Imported scrap prices slide $10/t w-o-w on bearish Turkiye cues

• Turkiye prices drop amid oversupply, weak steel demand
• Weak Vietnam currency makes Japanese scrap expensive

Vietnam’s imported scrap prices continued to decline by up to $10/t w-o-w, driven primarily by lower deep-sea prices from Turkiye and expectations of softer billet prices in the near term.

Turkiye, as a key benchmark for the region, continued deep-sea scrap purchases at reduced prices, further dampening sentiment among other Asian buyers. Turkiye has lately been seeing a slide in prices due to the current glut in supply, coupled with weak finished steel sentiments.

This week, offers for bulk heavy melting scrap HMS 80:20 were heard at $340/t CFR Vietnam. However, with bids only reaching $330/t, this reflected a $5-10/t decrease from last week’s levels of $340-350/t.

Weekly assessments

• US-origin HMS 80:20 deep-sea bulk cargoes were assessed at $340/t CFR, down by $10/t w-o-w.
• Japanese H2 edged down by $5/t w-o-w to $325/t CFR Vietnam.
• A mixed cargo of 10,000 t of HS and Shindachi was offered at $360/t CFR Vietnam.

Recent deals:

• A 5,000-t shredded cargo was booked at $345-346/t CFR Vietnam, while other bids for the material were heard at $340/t or lower.
• A South American-origin HMS 70:30 in 40-foot containers was sold at $287-288/t CFR Vietnam.

Market commentary

A trader noted, “With downstream rebar and billet prices also declining, steelmakers have little incentive to buy scrap at high prices.”

A market participant informed that H2 scrap offers dropped to $325-330/t CFR Vietnam, compared to $335-345/t in the previous week. Bids also weakened to $315-320/t, down from $325/t at the end of the previous week.

Another Vietnamese trader said, “Although the US dollar is weakening, the Vietnamese dong continues to depreciate due to the country’s export focus. As a result, Vietnamese buyers are unable to afford higher Japanese scrap prices.”

From the supply side, a Japanese source said, HS offers were at $345/t and bids at $335/t CFR Vietnam.

A Vietnam-based mill source stated that local scrap prices remained stable at $305-310/t. However, some traders have started to cut back on scrap purchases due to sluggish demand from local mills.

Domestic market scenario

• In northern Vietnam, bids for domestic scrap ranged between VND 8,600-8,800/kg ($331-338/t (excluding VAT) down from the previous week.
• In the southern region, prices ranged between VND 8,000-8,550/kg ($308-329/t) (excluding VAT) stable w-o-w.

Additional update

With Bangladeshi mills adopting a wait-and-see approach, Vietnamese mills capitalized on the opportunity and booked several higher-grade scrap cargoes at significantly lower prices.

Outlook

The market is expected to remain soft in the near term, with continued downward pressure on scrap prices due to weaker demand from both local mills and regional buyers. As billet prices are expected to stay low, scrap prices are likely to follow suit, keeping pressure on sellers. Additionally, the depreciation of the Vietnamese dong may limit the ability of local buyers to purchase higher-priced scrap, further slowing market activity.