Vietnam: Imported scrap prices softens w-o-w amid slow demand, bid-offer disparities

• Demand for long steels increases post-holidays
  
  
• H2 restocking likely next week as prices stabilise
  
  

Imported ferrous scrap prices in Vietnam edged down by up to $7/tonne (t) w-o-w, amid sustained subdued spot activity accompanied by a wide bid-offer gap.

Some buyers earlier turned to South American HMS 80:20 containerised scrap as it was cheaper than Japanese H2, which was seen as too costly. However, traders expect H2 buying to resume soon due to longer transit times and logistical issues with South American shipments.

Buyers have maintained a cautious stance since late April, contributing to the slowed activity. However, expectations are rising for a pick-up in near-term demand, driven by improved finished steel market conditions.

Weekly assessments

• US-origin HMS 80:20 bulk was assessed at $338/t CFR, down $2/t w-o-w.
  
  
• Japanese H2 was assessed at $323/t CFR, also down $7/t w-o-w.
  
  

Market commentary

Japanese H2 scrap was offered at $325/t CFR in bulk, while bids were heard at $320/t CFR. The previous week's tradable level also remained at $325/t CFR. US-origin HMS 80:20 bulk cargoes saw offers at $345/t CFR, with bids at $330/t CFR, a persistent wide bid-offer spread.

A trader noted that, "H2 restocking is likely next week, as buyers have been largely inactive with prices having already bottomed out on the seller's side last week. Buyers now may feel compelled to return."

A Japanese supplier noted that HS scrap offers softened to $345-350/t CFR, while bids remained near $330/t CFR amid muted activity and limited liquidity.

Domestic scrap market

North Vietnam: Domestic scrap bids stood at VND 8,500-8,800/kg ($327-339/t), stable w-o-w (excluding VAT).

South Vietnam: Prices ranged between VND 7,900-8,600/kg ($304-331/t), also unchanged from the previous week (excluding VAT).

Construction sector and steel demand

A trader said that demand for long steel products in Vietnam has notably strengthened following the holidays, underpinned by increased construction activity. "There are many active infrastructure projects; mills even had loading queues earlier this week. However, steel exports remain pressured due to US-imposed tariffs."

Outlook

Scrap and steel demand in Vietnam is expected to gain further support later towards the second half of this month from planned government-backed construction initiatives, which could boost market activity and prices going forward.