Vietnam: Ferrous scrap imports fall marginally in CY’21 amidst Covid restrictions

Vietnam’s ferrous scrap imports were recorded at 5.67 million tonnes (mn t) in CY’21 (Jan-Dec’21), down 3% y-o-y vis-a-vis 5.85 mn t seen in CY’20. The volumes fell mainly due to Covid-induced lockdown restrictions.

Japan was the largest supplier followed by the US and Australia, in CY’21.

The highest monthly volumes (in CY’21) were recorded from May to Jul’21 at an average of around 0.6 mn t. However, the import volume started falling since August (at 0.3 mn t) as the trade was affected by the severe Covid infections in Ho Chi Minh City which was the hardest-hit area in Vietnam. As the outbreak spread to factories, the subsequent control measures in the industrial areas eventually affected productivity and output.

In line with weaker economic performance in Q3CY’21, the growth of construction, automotive, manufacturing industries in Indonesia, the Philippines and Singapore slowed down while the same in Malaysia, Thailand and Vietnam contracted compared to the previous quarter, as per data released by SEAISI.

Market highlights:

• Imports from Japan fall: Vietnam’s scrap imports from Japan were recorded at 2.26 mn t in Jan-Dec’21, down by 34% against 3.41 mn t in Jan-Dec’20.

Imports declined due to discrepancy in bids and offers as Vietnam mills showed less interest in booking at higher prices from Japan. Meanwhile, Japanese suppliers were active in trading in the domestic market.

• Import volumes from US rebound: The US exported 1.70 mn t of scrap to Vietnam in Jan-Dec’21, rising by 65% y-o-y as against 1.03 mn t in Jan-Dec’20.

Other major ferrous scrap exporters were Australia and Hong Kong at 0.55 mn t and 0.5 mn t respectively.

Outlook
Increasing Covid cases have pulled down market sentiments further in Dec’21. However, Japan’s monthly Kanto Tetsugen scrap export tender for Jan’22 was concluded after remaining inconclusive for the past two months. A total of 10,100 t of H2 scrap was awarded at an average price of JPY 50,983/t ($442/t) FAS. The tender was heard to have been concluded for Vietnam, signaling a resumption of buying activities.