The momentum of imported scrap trade activities slowed throughout the past week amid limited finished steel demand in Vietnam resulting in scrap prices being under pressure. However, one of the major mills of the country has reportedly bought a bulk cargo recently but confirmation is still awaited from the buyer’s end.
Steel major Hoa Phat was heard to have bought a 30,000 t deep-sea cargo comprising 15,000 t of HMS 1&2 (80:20), 10,000 t of shredded and 5,000 t of PNS last weekend at an average price of around $410/t CFR basis. Mills have sourced material ahead of the approaching Tet holidays in end-January.
Assessments for US-origin bulk offers are now at $395/t CFR, largely stable w-o-w. However, a few buyers are yet to resume bulk bookings due to disparities in bids and offers.
This is the second bulk cargo after 10,000 t was booked in Japan’s Kanto scrap export tender. However, the deal price in the tender was higher than expectations.
SteelMint’s assessment for Japanese H2 material is at $385-390/t CFR, down by $10/t w-o-w.
Scrap imports fall in Nov
Vietnam’s ferrous scrap imports stood at 232,119 t, down by 18% m-o-m in November as against 283,490 t in October. The US was as the largest supplier at 83,293 t followed by Japan and Hong Kong at 62,232 t and 37,051 t, respectively. Import volumes y-o-y decreased by 33% to 3.46 mnt in January-November this year.
Production and sales in Nov
Despite slow production and low demand, steel producers managed to increase their monthly sales of all kinds of steel products, according to the Vietnam Steel Association (VSA).
- Sales of all kinds of steel reached 1.942 mnt, up 2.87% over the previous month but down 16.2% y-o-y.
- Finished steel production reached 1.825 mnt, down 10.78% compared to October and a drop of 36.8% over the same period in 2021.
Most steel companies are likely to post depressing results in Q3CY22, according to a recent report on the construction and building materials industry by VNDirect Securities Corporation.
Moreover, high input prices, rising interest rates, and a weakening Vietnamese dong have caused many businesses to record net losses in the Q3.
South East Asia overview
- Thailand: Central American scrap is being offered at $340/t but buying interest is not above $320/t. Hence, trading activities have remained slow.
- Indonesia: Offers for shredded scrap were quoted at $403/t CFR, whereas HMS 1 now at $395/t. Buyers have shown little interest in quoted offers, though.
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