Import activity in the scrap markets in South Korea and Vietnam has remained muted this week again as customers in these countries have been relying fully on local sources, as domestic prices have been much better than import prices and overall demand has been reduced.
In Vietnam, offers for the benchmark ex-Japan H2 scrap have been at $370-380/mt CFR, down slightly by $5/mt over the past week. Some sources said that lower levels are possible to get, as low as $355-360/mt CFR, but as suppliers do not see any demand from Vietnam, they are not giving such offers, understanding that it will fail to trigger sales.
“The local price equivalent to H2 is only at around $300-315/mt. I believe now there are almost no deals due to the slow market,” a local Vietnamese mill said. Even though local scrap prices have increased a bit over the past week, they are still much better than import quotations. “They rebounded some days ago by $5-10/mt, but I think it is just a short wave only,” he added.
In South Korea, the available offer prices for ex-Japan H2 are at JPY 45,000/mt ($318/mt) FOB or definitely above $350/mt CFR, and so the local sourcing is still much better. “Domestic scrap prices continue to decline. Only this week we’ll be seeing a drop of 40,000 won [$29/mt],” a local source said.
Last week, US West Coast offers to South Korea have been indicated at around $375-380/mt CFR, but now even $10-15/mt prices cannot be attractive for buyers in the country, while sellers also want to step back in the bad market conditions. “Local flow of scrap is more than sufficient. So, there is not much interest in imports yet. The domestic scrap equivalent to the HMS price will be around $333/mt by the end of this week. So, there’s no point approaching import scrap,” a local source said.