Vietnam: Ferrous Scrap Imports Up Marginally in May

Vietnam – the fastest emerging steel market in South East Asia has recorded marginal growth by 4% M-o-M in its monthly scrap imports in May’18 as against imports recorded in Apr’18. As per recently released customs data, Vietnam has imported 304,174 MT ferrous scrap in May’18 as against 293,781 MT scrap imports in Apr’18.

On yearly premises, ferrous scrap imports to Vietnam dropped considerably by 16% Y-o-Y in May’18 as against 363,039 MT ferrous scrap imports recorded in May’17.

In May’18, average global scrap prices turned down by USD 10-15/MT on M-o-M while Japanese average scrap export offers fell sharply down in Apr’18 and remained at JPY 33,000-34,000/MT (USD 298-307), FoB Japan levels throughout May’18. Amid fallen scrap prices, Vietnam’s scrap imports increased marginally in May’18.

Japan remained largest scrap supplier to Vietnam in May’18 – Japan remained largest ferrous scrap exporter occupying 27% share in total ferrous scrap imports to Vietnam. Japan supplied 94,304 MT ferrous scrap which increased by 20% M-o-M as against 78,602 MT in Apr’18.

In May’18, Vietnam witnessed a significant rise in scrap supply from Japan (+20% M-o-M), Hong Kong (60,471 MT, +48% M-o-M) and Australia (35,410 MT, +65% M-o-M). UK witnessed a mammoth rise in scrap exports supplying 38,145 MT as against minor volumes in Apr’18. However, imports haven’t grown sharply as it witnessed sharp fall in scrap imports from other prominent exporters like USA (27,528 MT, -48% M-o-M), Singapore (9,576 MT, -41% M-o-M) and Netherland (nil volumes, -100 M-o-M).

United States scrap exports fell to nearly half in May’18 – After an announcement of US import tariffs, Vietnam’s scrap imports from US plunged successively second time to nearly half on M-o-M basis. Vietnam also witnessed increased pressure on its steel exports amid stricter US trade protections. US scrap exports recorded at 27,528 MT witnessing 48% M-o-M fall in May’18 against 53,182 MT in Apr’18 while it was recorded at 102,307 MT in Mar’18.

Vietnam’s scrap imports from China may come down – Recently Chinese Govt cracked down smuggling of ferrous scrap which was being exported to South East Asian countries illegally without paying 40% export duty. Although Vietnam remained largest importer of Chinese scrap occupying 54% share in Q1’2018, the impact on the supply side will remain insignificant and Vietnamese importers may shift to other major scrap suppliers like Japan, USA and UK instead of China.

Vietnam scrap imports rose 10% Y-o-Y during Jan-May’18 on rising crude steel production – During first five months of CY18, Vietnam imported 1.70 MnT ferrous scrap, up 10% Y-o-Y as against 1.54 MnT ferrous scrap imports during Jan-May’17.

According to World Steel Association, Vietnam witnessed 15% Y-o-Y growth in crude steel production during Jan-Apr’18. The country produced 3.69 MnT crude steel during first four months of 2018 as against 3.21 MnT crude steel production recorded in the same period last year. Rising EAF steel output in Vietnam has led to surged scrap imports as compared with last year.

During Jan-May’18, Japan remained largest exporter to Vietnam (0.55 MnT, -2% Y-o-Y) followed by United States (0.39 MnT, +34% Y-o-Y), Hong Kong (0.25 MnT, stable Y-o-Y) and Australia (0.18 MnT, +6% Y-o-Y) respectively occupying 32%,23%,15% and 11% share in total scrap imports to Vietnam.

Country-wise Vietnam ferrous scrap imports –

Quantity in MnT,
Source: SteelMint Research