East Asia: Japanese scrap export offers inch up despite subdued Vietnam demand

• Higher domestic mill purchase prices lift Japanese FOB prices
• Vietnamese buyers prefer competitively priced domestic material

Japan and Vietnam’s ferrous scrap markets remained relatively firm during the assessment week ended 5 October, with higher freight costs supporting Japanese offers into Vietnam despite sluggish downstream demand. Japanese H2 FOB export prices also increased amid higher domestic mill buying prices, while Vietnamese buyers remained cautious and continued to favour competitively priced domestic material.

Weekly assessments

• Japanese H2 scrap was at $372/t CFR Vietnam, up by $1/t w-o-w.
• Japanese H2 scrap was at JPY 50,500/t ($320/t) FOB Tokyo Bay, up by JPY 700/t ($4/t) w-o-w.
• US-origin HMS 80:20 bulk stood at $392/t CFR Vietnam, up by $1/t w-o-w.

Japan

In Vietnam, Japan-origin H2 offers were generally heard at $375/t CFR, with higher indications at $380-385/t CFR. Indicative bids were around $370/t CFR or below, leaving a noticeable gap between buyer and seller expectations. The wide range of offers reflected differences in individual shippers’ selling positions and freight costs, which varied by loading port and prevailing shipping conditions.

Japan-origin HMS 50:50 scrap was offered at $380-382/t CFR Vietnam. The usual premium over H2 narrowed during the week, with suppliers’ urgency to sell reportedly influencing pricing. With the two grades offered at similar levels, buyers showed a preference for H1/H2 50:50 because of its better grade mix.

H2 scrap prices strengthened, with FOB Tokyo Bay rising JPY 700/t w-o-w to JPY 50,500/t ($320/t), while FAS collection prices stood at JPY 47,000/t ($297/t). Japan’s FOB H2 scrap prices increased as higher domestic mill buying prices and firm regional demand pushed up exporters’ replacement costs. Tokyo Steel’s JPY 500/t price increase across its plants further supported domestic scrap values, allowing exporters to maintain firmer FOB offers.

Vietnam

Vietnam’s imported scrap market remained supported by elevated freight costs, although buying interest stayed limited. US-origin bulk HMS 80:20 offers were heard at $395-400/t CFR Vietnam, with no fresh bookings reported, while Japanese H2 offers edged up to $375-385/t CFR. The deep-sea bulk market remained largely stable amid subdued demand and firm freight rates.

High freight costs continued to lift import replacement costs, while buyers increasingly preferred domestic scrap. Some mills raised their H2 buying prices by VND 100-150/kg ($4-6/t) to VND 9,900-9,950/kg ($381-382/t) and VND 9,700-9,750/kg ($373-374/t), respectively, during the week.

Vietnam’s finished-steel market remained broadly stable, with rebar offers at VND 14,500-14,800/kg ($557-569/t) exw, supported by moderate buying interest. Sluggish downstream demand, particularly in private housing, could limit further price gains despite firm freight and seller offers.

Outlook

Imported scrap prices are expected to remain supported in the upcoming days as firm freight costs and higher supplier replacement costs limit downside. However, subdued downstream demand and buyers’ preference for domestic scrap could restrict fresh import bookings. Japanese exporters may also remain cautious on offers, while Vietnamese mills are likely to continue seeking competitively priced cargoes.