Vietnam: Ferrous Scrap Imports Hit 3 Year Low in Feb’19

As per data released by the customs department, Vietnam imported 212,690 MT ferrous scrap in Feb’19 as against 235,113 MT ferrous scrap recorded in Jan’19. Ferrous scrap imports hit 3-year low in Feb’19 as prior to this, the lowest was recorded at 182,641 MT in Feb’16.

On yearly premises, ferrous scrap imports to Vietnam dropped by 17% Y-o-Y in Feb’19 as against 254,622 MT ferrous scrap in Feb’18. On strong domestic demand, imports from USA and European markets fell sharply while major exporters like Hong Kong and Australia observed a significant drop in exports in Feb’19 to Vietnam.

Vietnam’s crude steel production recorded at 1.26 MnT in Feb’19, down 11% M-o-M as against 1.42 MnT in Jan’19 and up 52% Y-o-Y as against 0.83 MnT in Feb’18.

Japan remained largest scrap supplier to Vietnam – Japan remained the largest ferrous scrap exporter supplying 119,229 MT ferrous scrap in Feb’19, sharply up 46% M-o-M as against 81,774 MT in Jan’19. Exports from Japan gained speed after the Chinese New Year holidays during mid-February. Followed by other prominent suppliers were Australia (27,111 MT, -28% M-o-M), Hong Kong (13,099 MT, -66% M-o-M) and USA (41,025 MT, -90% M-o-M).

Projections for ferrous scrap imports remained high as Vietnam which was completely dependent upon imports to meet its steel demand is slowly reducing its reliance on the same amid Vietnamese steel companies’ increase in production capacity and the imposition of trade defense measures.

Imported scrap offers to Vietnam continue downtrend – SteelMint learned from market participants that imported scrap offers to Vietnam have dropped following weakened prices in the global market and limited demand has witnessed from most of the importers amid holiday mood in the country amid public holidays during 14-15th Apr’19.

According to sources, in recent trades reported in the market, Vietnamese steelmakers have observed few trades at corrected prices. In recent trades, a northern region based steel mill booked Hong Kong origin HMS 1&2 (50:50) scrap in bulk volume at USD 332/MT, CFR with LC usance of 30 days. Offers for HMS 1&2 from Hong Kong are mostly being quoted at USD 330-332/MT, CFR.

Japanese bulk offers are being reported at around USD 325-330/MT, CFR, HS scrap at USD 370/MT, Shredded at USD 360-365/MT, CFR Vietnam. While Japanese domestic H2 price stands at JPY 31,000/MT (USD 277) at Utsunomiya works of Tokyo Steel. Japanese scrap offers have been moved down by around USD 15-20/MT in the last couple of weeks.