Vietnam, South East Asia’s biggest importer of ferrous scrap, imported 0.55 million tonnes (mn t) of the material in Apr’21. flat on a month-on-month basis against Mar’21.
However, on a year-on-year (y-o-y) basis, export volumes in Apr’21 increased 41% compared to 0.39 mn t in Apr’20. The country’s ferrous scrap imports during Jan-Apr’21 saw a rise of 5% y-o-y to 1.8 mn t against 1.71 mn t in the same four months of the previous year.
- Imports from Japan up significantly: Japan continued as the largest scrap supplier to Vietnam in Apr’21 at 0.28 mn t, up 27% m-o-m against 0.22 mn t in Mar’21. However, imports from the US and Australia dropped owing to increase in scrap offers, tight availability and sharp hike in freight rates.
- Steel production, sales up in Apr’21: Domestic production and sales of steel items in the first four months of 2021 increased significantly compared to the previous year. Steel production in Jan-Apr’21 touched more than 10.4 mn t, up 38.3% over the same period in 2020, as per a Vietnam Steel Association (VSA) report. Steel production in Apr’21 stood at 2.8 mn t, rising 52% y-o-y.
- Rise in Vietnam’s imported scrap prices: SteelMint’s monthly price assessment for bulk H2 scrap stood at $460/t CFR Vietnam in Apr’21 and US bulk HMS (80:20) at $455/t CFR Vietnam in Apr’21. Buyers turned cautious on high offers and are waiting for prices to stabilise and are holding back fresh bookings for April shipments.
- Domestic scrap prices rise further in Mar’21: Domestic scrap prices have soared by around total VND 1,100/kg ($47/t) in Mar’21, following the global price trend. The H2 grade scrap price stood at VND 37,000/kg exw.
- Steel demand rises on increased construction activities: Vietnam’s response to the pandemic and early easing of restrictions on construction activities increased the country’s demand for steel. New steel investments are being planned, fueling a steady demand for ferrous scrap. In addition, Vietnam’s production of steel rose because it seized the opportunities to sell more semi-finished steel to China in the previous two years.
- Rise in billet export offers: Global scrap prices, supported by climbing Chinese rebar offers and strong seasonal demand in China, pulled up global billet prices as well as billet export offers from Vietnam. Few China destined-deals were struck by the mills in Vietnam for Apr’21 shipments.
Outlook
Bids have started declining in the second half of May’21, tracking Chinese steel futures. Buyers are hesitant of procurements at higher offers.
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