Vietnam: Rising steel inventories weigh on ferrous scrap prices

South East Asia’s prominent scrap importer, Vietnam, has witnessed limited market activities, as the nation continues its struggle with the Covid-19 pandemic. The imported scrap market remained quiet for yet another week while offers were mostly absent over the last few weeks. The government has extended the lockdown for another one month in the most Covid-affected Ho Chi Minh City, located in southern Vietnam, while northern Hanoi city is mulling a partial lockdown easing.

• SteelMint’s assessment for Japanese bulk H2 are heard at around $470/t CFR Vietnam levels, lower by $5/t w-o-w.
• No firm offers were reported for US-origin bulk HMS 1&2 (80:20).However, price indications are around $505/t CFR Vietnam.

Prices of imported ferrous scrap into Turkey have fallen slightly by around $5/t in a deal concluded recently, sources informed SteelMint. A US bulk cargo was booked by an Aegean region-based steel mill. The cargo comprised 18,500 t of HMS 1/2 (80:20) at $455/t CFR and 1,500 t of bonus and 5,000 t shredded scrap at $470/t CFR each.

Vietnam’s domestic scrap and steel prices fall: Vietnam’s domestic market activities remained limited for yet another week. The continuous increase in Covid-19 cases has impacted the overall steel industry in Vietnam, as prices have dropped significantly in just a week across raw material to finished steel, sources informed SteelMint.

• Domestic ferrous scrap prices in Vietnam have moved down by VND 400/kg ($17/t) w-o-w. The new purchase price for H1 scrap stands at VND 11,400/kg ($496/t), while VND 11,100/t ($483/t) is the price settled for H2 grade scrap. Sources believe that the current price is also not workable at the moment as mills are sitting on high steel inventories.
• Domestic billet (induction furnace route) offers were at around VND 14,200-14,250/kg exw, moving down by VND 700/kg levels, against the preceding week. Rolling mills, meanwhile, have stopped bidding and booking fresh billet slots, as buyers were active in the billets market till last week.
• Domestic rebar prices fell by VND 100/kg to VND 15,800/kg exw last week, as compared to VND 15,900-16,050/kg exw recorded in the preceding week.
  “Due to Covid curbs, steel demand is week. Hence, steel mills have achieved only 20-25% of steel salesand are thus maintaining high inventory levels,” said a Vietnam-based source.

Vietnam’ ferrous scrap imports up 5% m-o-m in Jul’21: Vietnam’s ferrous scrap imports were recorded at 0.66 million tonnes (mn t) in Jul’21, an increase of 5% m-o-m vis-a-vis 0.63 mn t in Jun’21. The US was the largest supplier followed by Japan in Jul’21. Ferrous scrap import bookings rose on account of rising steel demand and improved construction activities in the previous month before the lockdown had started.

Market highlights of other SE Asian countries

• Indonesia’s imported scrap market resumes trade gradually: After several weeks of silence amid Covid lockdown, Indonesian steelmakers resumed their inquiries for scrap slowly. Recently, a decent quantity of PNS has been sold at $500/t CFR Jakarta basis, highlighted a source.
• Imported scrap offers firm in Thailand: Imported scrap offers into Thailand were mostly stable last week due to slow trade activities. Offers for HMS 1&2 (80:20) for Central America-origin remained at $425/t CFR, unchanged against last week, sources confirmed to SteelMint.
• Taiwan’s imported scrap market remains subdued: Imported scrap offers for shredded are being quoted at $490/t CFR Kaohsiung levels. While bids for HMS 1&2 (80:20) from buyers were at $435/t CFR Taichung basis, no deals were heard last week.