While scrap prices in Southeast Asia have continued to increase over the past week, Vietnam is facing the same result, receiving higher offers from its scrap suppliers. However, the situation in the Vietnamese steel market is still unchanged, steel demand is on the low side, hence Vietnamese mills are in no rush to book scrap from the currently voiced offer prices. “We need to watch further. In fact our steel market is still in a bad situation. Some mills here have cut down their [steel] prices this week,” a Vietnamese source commented. Market players think Vietnamese mills will monitor the steel demand closely and they expect a recovery in demand in October after the rainy season ends.
Currently, Japanese H2 scrap offers to Vietnam are at $425-430/mt CFR, increasing from the indicative range of $390-395/mt CFR recorded last week. Vietnamese mills can only afford to buy Japanese scrap at $395-400/mt CFR, SteelOrbis hears. Considering the approximately $60/mt freight between Vietnam and Japan, this offer range corresponds to $365-370/mt FOB Japan. SteelOrbis observes that Japanese export scrap has been supported by the demand coming from its biggest buyer in the region, namely South Korea. Having remained out of the market for a long time, South Korean producer Hyundai is back with bids for Japanese scrap for the second consecutive week. Hyundai raised its bid for Japanese H2 grade on August 24 to JPY 46,000/mt ($337/mt) FOB.
As a result, the reference price for ex-Japan H2 scrap has increased by JPY 3,500/mt ($22/mt) on the lower end due to the higher bids coming from South Korea and by JPY 2,000/mt ($11/mt) on the upper end due to the upward pressure observed both in Vietnam and Taiwan to JPY 46,000-46,500/mt ($337-341/mt) FOB. The dollar-based changes were calculated after taking consideration of the Japanese yen-US dollar exchange rate fluctuation.
A Vietnamese producer has concluded a deal for ex-US HMS I/II 80:20 scrap in containers at $370-380/mt CFR this week. Meanwhile, no new offers from the US West Coast for bulk HMS I/II 80:20 scrap cargoes were heard this week. Last week the price was at $410-435/mt CFR to Vietnam and was not considered acceptable by Vietnamese buyers.
Finally, an ex-Hong Kong booking for HMS I/II 50:50 scrap by bulk to Vietnam has been concluded at $388/mt CFR earlier this week, which is again $28/mt higher than the deal closed last week from Macau for this grade.
$1 = JPY 136.40
