Vietnam’s ferrous scrap imports were recorded at 3.05 million tonnes (mn t) in H1 CY’21 (Jan-Jun’21), an increase of 23% y-o-y vis-a vis 2.48 mn t in Jan-Jun’20. Japan was the largest supplier at 1.43 mn t followed by the US at 0.8 mn t in this period. Ferrous scrap imports rose on the back of strong steel demand and rise in steel output. According to data released by the Vietnam Steel Association (VSA), total steel production reached 15.9 mn t, up 37% over the same period in CY’20.
Ferrous scrap imports in Jun’21 were recorded at 0.63 mn t, up slightly by 2% against 0.62 mn t in May’21. Vietnam’s scrap imports remained supported by rising global demand for billets and active restocking due to strong steel demand as compared to last year. However, on a y-o-y basis, imports increased by 47% as compared to 0.43 mn t in Jun’20.
Imports from Japan fall in Jun: Vietnam’s scrap imports from Japan were recorded at 0.25 mn t in Jun’21, down by 11% against 0.28 mn t in May’21. Japanese steel makers paid less attention to exports because of the rise in domestic steel demand, limited supplies and higher prices.
The US was the second largest scrap supplier to Vietnam in Jun’21 at 0.27 mn t , up as against 0.13 mn t May’21 due to excess availability of bulk cargoes from the US west coast.
Imported scrap prices from Japan up: SteelMint’s monthly price assessment for bulk Japanese H2 scrap stood at $503/t CFR Vietnam in May’21 as against $462/t in Apr’21.
However, US bulk HMS (80:20) was at $510/t CFR Vietnam in May’21 against $458/t CFR a month ago.
Domestic scrap prices down: Domestic scrap prices increased further in May’21. The H2 grade prices stood at VND 10,560/kg and the H1 grade at VND 10,860/kg. However, in Apr’21, H2 prices stood at VND 10,665/kg and the H1 grade at VND 10,960/kg.
Outlook
Steel demand is subdued in Vietnam due to rising Covid cases. Scrap consumption has thus slowed down. However, scrap collecton is also down, resulting in a hike in domestic scrap prices. Ferrous scrap imports are expected to remain on the lower side in the near term.
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