Vietnam’s imported scrap trade activities have slowed down due to lower domestic consumption and limited demand owing to Covid restrictions. High steel prices have also considerably dented the country’s developmental spree, stalling several major infra projects.
Bulk imported scrap offers for Japanese H2 scrap are at $485-495/t CFR Vietnam basis, lower by $10 w-o-w. The US-origin bulk scrap offers are mostly absent and no firm offers/deals were reported, sources informed to SteelMint.
Vietnam ferrous scrap imports rise 23% in H1CY’21: Vietnam’s ferrous scrap imports were recorded at 3.05 million tonnes (mn t) in H1CY’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 a rise in steel output.
Vietnam market highlights:
- Domestic scrap prices likely to go up: Domestic scrap prices more-or-less remained unchanged against the preceding week at VND 11,200/Kg ($486) and VND 10,900/Kg ($473) for H1 and H2 respectively. However, due to limited scrap availability in the domestic market, some scrap traders may raise offers to VND 11,600/Kg ($505) for the H1 grade, Vietnam-based local sources informed SteelMint.
Notably, due to the continuous hike in the number of Covid cases, Vietnam’s two major cities Hanoi and Ho Chi Minh are under strict lockdown, causing transportation and logistics hurdles. Currently, construction sites are closed and waiting for further instructions from local authorities, SteelMint learnt from a reliable market source. Domestic rebar offers are now at VND 15,900-16,000/Kg exw basis.
- Vietnam mills active in billet exports: Vietnam’s mills remained active in the exports market goaded by a dull domestic demand. According to SteelMint’s sources, BF-route offers from Vietnam were at $700/t CFR Manila. With domestic sales turning dull in Vietnam owing to Covid restrictions, the mills are likely to remain active in exports.
Early last week, deals of IF-route billets were reported at $690/t CFR the Philippines.
The Vietnam government has proposed an export duty of 5% on billets exports last week, intending to ease domestic steel prices. In the latest update received, the Vietnam Steel Association (VSA) has petitioned the government against the imposition of the export tax.
South East Asia Market highlights:
- Indonesia scrap market quiet on lockdown: The Covid situation in Indonesia has yet to normalise. Many mills were forced to close. Due to a dull domestic market, and slow steel consumption there were no active bookings last week, said a market source.
- Thailand’s imported scrap deals limited: Imported scrap trade into Thailand remained limited, as offers continue to move up as HMS 1&2 (70:30) is now available at $435/t CFR basis, while last week HMS 1&2 (80:20) was recorded at $425/t CFR levels, sources confirmed to SteelMint.
- Imported scrap prices into Taiwan fall further: Imported scrap prices into Taiwan fell further, while trade continued to decline. Bids for HMS 1&2 (80:20) were recorded at $450/t CFR Kaohsiung levels, last week but which have now come down to $442-445/t CFR levels.