Vietnamese mills have turned their focus to purchases of HMS I/II 80:20 scrap purchases from Australia and the US, as Japanese sellers have increased offer prices for H2 very sharply amid the lively demand and uptrend in their domestic market. As a result, prices for HMS I/II 80:20 have posted visible increases compared to the previous deals.
SteelOrbis has learned that Vietnam has bought a cargo from Australia, with HMS I/II 80:20 scrap priced at $516/mt CFR. In addition, there has been a rumour of a sale of ex-US HMS I/II 80:20 scrap at $525/mt CFR, but this could not be confirmed by the time of publication. The prices in abovementioned deals are $11-20/mt higher than a trade from the US done in the middle of September. Last week, the tradable level was assessed at $510-515/mt CFR, according to SteelOrbis’ information.
The stronger interest in HMS I/II 80:20 scrap purchases in Vietnam has been supported by a very sharp hike in ex-Japan prices. Offers for H2 scrap to Vietnam have surged to around $530/mt CFR this week, which is significantly higher than the levels recorded in deals last week at $500/mt CFR. This price is considered to be unacceptable by Vietnamese customers, as ex-Japan H2 scrap is usually at least $10/mt cheaper than import HMS I/II 80:20 scrap.
Vietnam is gradually lifting its measures taken against the severe spread of Covid-19 in the country. According to Reuters, Le Hoa Binh, deputy chairman of Ho Chi Minh City's people's committee, stated that as of October 1 Ho Chi Minh City's industrial parks, construction projects, malls, barber shops, hospitality facilities and restaurants for takeaways can resume operations. This development may increase the country’s need for construction steel in the coming period, pushing up scrap prices also.
As an uptrend is seen in the Asian scrap market and demand for HMS I/II 80:20 scrap in Vietnam has increased, other buyers in the region will have to increase their bids if they will need to secure tonnages. In particular, at the moment the price idea of South Korean mills for ex-US HMS I scrap is only at $505-510/mt CFR, unacceptable for most sellers from the US West Coast.