Vietnam’s import scrap prices have moved up once again over the past week, but steel prices are not moving in the same direction, SteelOrbis observes. Some Vietnamese mills have low scrap inventory levels and so they are forced to pay higher levels for import scrap. However, instead of bulk cargoes which are priced higher, containerized scrap or Japanese H2 is favoured by buyers.
The most recent ex-Japan H2 scrap cargo was bought at $412/mt CFR Vietnam, $7-14/mt higher than the levels recorded late last week in the range of $398-405/mt CFR. Also, there are some deals done this week around $410s/mt CFR for the same grade. These levels of $410-412/mt CFR are $12-15/mt higher than Vietnamese mills’ desired levels voiced last week. Considering the approximate $60/mt freight between Vietnam and Japan, this offer range corresponds to $350-352/mt FOB Japan.
Yesterday, August 31, Hyundai Steel increased its bids for Japanese H2 grade by $24/mt to JPY 49,800/mt ($359/mt) FOB, and so South Korean producers are now bidding higher prices than their competition. Meanwhile, Kanto Bay FAS prices for H2 scrap prices corresponded to JPY 49,000-51,000/mt ($353-368/mt) FOB yesterday. The Japanese yen exchange rate was in the range of JPY 136.40-138.69 to the dollar yesterday.
As a result, the reference price for ex-Japan H2 scrap has increased by JPY 3,000/mt ($14/mt) on the lower end due to the higher prices coming from Vietnam and by JPY 3,500/mt ($17/mt) on the upper end due to South Korean mills’ bids to JPY 49,000-50,000/mt ($351-358 /mt) FOB. The dollar-based changes were calculated after taking into consideration the fluctuation of the Japanese yen-US dollar exchange rate over the past week.
There is a rumour that a Vietnamese producer concluded a deal for ex-US West Coast bulk HMS I/II 80:20 scrap cargoes this week at $435-440/mt CFR. This information was not confirmed at the time of publication, but a SteelOrbis contact said that ex-US and ex-EU bulk HMS I/II 80:20 scrap offers to Vietnam are currently at $435-450/mt CFR. A Vietnamese source considers this level to be quite high.
Earlier this week, an ex-Hong Kong cargo for HMS I/II 50:50 scrap by bulk to Vietnam was offered at $405/mt CFR Hai Phong, significantly higher than the $388/mt CFR fixed in a deal last week. While the buyer rejected this price at that time, later in the week the buyer changed its mind but this time the seller was unwilling to sell at $405/mt CFR, stating expectations of an increase in prices.
$1 = JPY 139.51