Vietnamese steel market has been quieter this week, performance is reduced as the major steelmaker in Vietnam, Hoa Phat has announced that it will reduce its steel prices with two separate steps. According to a source, “Vietnamese mills have to cut their production, hence they do not need to import scrap at high levels.” SteelOrbis observes that most of the Vietnamese mills have stopped buying scrap for now, just few mills are sharing bids.
The range of Japanese H2 offers to Vietnam narrowed to $390-395/mt CFR from the $385-400/mt CFR recorded last week. However, Vietnamese mills’ bids are significantly lower than this range at $370/mt CFR. Although some market players think that the lower Japanese scrap generation supported the price levels of H2 grades, a Japanese source reported that “Toyota's auto production fell by 50,000 units in October compared to September due to lack of semiconductors and auto parts, but we do not expect this to support scrap prices as the full-year production plan remains unchanged.”
During the past week, Tokyo Bay FAS based prices have increased by JPY 1,000/mt on the lower end to JPY 48,000-49,000/mt ($325-332/mt) for H2 grade scrap, and are signaling for a JPY 49,000-50,000/mt ($332-339/mt) FOB for this grade. The FOB & dollar based prices have remained stable on the lower end, though decreased by $6/mt on the upper end week on week.
Therefore, the SteelOrbis reference price for ex-Japan H2 scrap has moved up by JPY 2,000/mt on the lower end over the week to JPY 49,000-51,000/mt ($339-349/mt) FOB. Due to the fluctuation of the Japanese yen against the US dollar, dollar based prices have increased by $14/mt on the lower end week on week, while the upper end increased by $1/mt since Wednesday, October 12. The lower end of the range represents offers to Vietnam and Tokyo Bay FAS prices, while the upper end has already been revised in line with Kanto tender.
Over the past week, Tokyo Bay FAS prices for HS have also moved up by JPY 500-1,000/mt to JPY 51,000-53,000/mt ($349-359/mt), the lower end declined by $4/mt as upper end remained unchanged. Tokyo Bay FAS prices for shindachi scrap have increased by JPY 500/mt on the lower end but decreased by JPY 500/mt on the upper end to JPY 50,000-51,000/mt ($339-349/mt), resulting in a $3-7/mt decrease.
An ex-Hong Kong cargo for HMS I/II 50:50 scrap by bulk to Vietnam was offered at $380/mt CFR this week, $5/mt lower than the levels recorded on September 29. According to a Vietnamese source, workable levels for Hong Kong origin is also at $370s/mt CFR.
This week, offers of bulk HMS I/II 80:20 scrap cargoes from the US West Coast to Vietnam are at around $405-410/mt CFR, decreased $5/mt on the lower end as compared to the figures of last week. SteelOrbis hears that Vietnamese buyers are bidding around $380-390/mt CFR for this grade.
Meanwhile, South Korean scrap market is very quiet this week. The local scrap procurement of mills increased this week. According to a source, “There was a price rise but afterwards flow came back up to around 90 percent.” SteelOrbis understands that local suppliers are selling some of their scrap due to their concerns that sentiment may change. But the recovery in the domestic scrap flow can also come to halt and South Korean scrap suppliers do not have much scrap in their yards. South Korean producers have scheduled maintenances and also Hyundai’s ongoing strike causes demand for scrap to remain relatively low. For the current week, it is safe to say that major South Korean producers were out of the import scrap market.
$1 = JPY 147.65