Vietnam: Imported scrap prices plunge on dull finished steel demand

Vietnamese imported scrap prices continued to decline as demand from end users remined subdued. Imported scrap prices moved down in the absence of buyers. However, despite the drop in offers, steelmakers and buyers remained silent and were far from aggressive in booking fresh slots.

According to the Vietnam Steel Association (VSA), steel prices took a nosedive. The situation was fuelled by weak demand, which was evidenced in October with a sales drop of about 2 million tonnes (mnt).

Meanwhile, indications for Japanese H2 material are at $380/t CFR levels. Japanese scrap prices continued to decline as overseas buyers are showing less interest for the time being.

“Vietnamese buyers unable to sell the finished steel material, demand has dropped more than 50%,” said a reliable market source. Fresh offers for US origin bulk offers are now at $360/t CFR levels, however buyers less interested in booking any cargo.

Steel producers are facing a highly unfavourable condition, caused by weakening demand, mounting input costs, tightening credit, rising interest rates and volatile exchange rates. The situation is not good on the demand side as global inflation and economic recession are weighing global demand, to the detriment of the domestic market. In the domestic market, the dull real finsihed market amid tightening credit compounds the situation by dragging down steel sales.

Vietnam’s billet export offers up w-o-w: Vietnam’s BF-grade billet export offers increased by around $15/t w-o-w. Current offers stand at around $480/t FOB. However, no active deals have been reported so far at current offers.

Overview of other SE Asian scrap markets

• Indonesia: The country has came back to the market after a pro long silence. Some mills have got new LC to book new slots for winter seasons. fresh offers for shredded are at $378/t CFR levels, while, HMS1 and PNS mixed are at $375/t CFR basis.
• Thailand: South American-origin HMS 1&2 (70:30) was booked around 300 t recently. Offers are being quoted at $295-300/t CFR, down by $5/t w-o-w.