As sea vessel traffic has been disrupted significantly due to rising oil prices, import scrap offers to Vietnam have followed suit and increased sharply this week. Some of this rise is the result of higher freight rates, while the rest is due to lower scrap availability both from the US and Japan. Billet prices in the region are also moving up, not helping the situation for Vietnamese buyers. Due to the rapid changes seen in the global steel and scrap segments since the war in the Middle East started, Vietnamese buyers have maintained a cautious stance and are monitoring the situation closely, while trying to resist higher offers by bidding lower prices.
Ex-US bulk HMS I/II 80:20 scrap offers to Vietnam have moved up sharply by $10/mt week on week to $375-380/mt CFR. Some sources reported that this is the “Trump effect”. No deals are heard to have been done at the new levels, sources add. US suppliers report that the pace of scrap collection at export yards both on the US West Coast and East Coast is lower than usual as the local market price levels are more attractive for sub-collectors. Also, rising sea freight is not helping anyone to sign an export contract. “The sea vessel market is very unstable right now. The price is moving up but also vessel availability is changing rapidly,” a source added. Vietnamese buyers have increased their bids for ex-US West Coast cargoes by $5/mt over the past week to $355-360/mt CFR, SteelOrbis hears.
Japanese H2 scrap offers to Vietnam were in the range of $340-345/mt CFR following the rises seen in freight as a result of the war in the Middle East, then increased towards $355/mt CFR. Market sources report that the rise in the local Japanese scrap market and the sharp increase recorded in the Kanto scrap export tender have provided support for higher export prices. Meanwhile, a deal in Vietnam is reportedly closed at $350/mt CFR for Japanese H2 grade scrap.
