As the international scrap market continues to move up, it is also impacting Vietnamese steelmakers. They have faced higher offers for scrap from the US and Japan and, though their bids have also started to increase gradually, no new deals have been reported so far, as suppliers are more bullish and buyers need some time to evaluate the situation.
SteelOrbis has learned that Japanese H2 grade scrap offers to Vietnam are currently in the range of $535-550/mt CFR, moving up $5-20/mt from the $530/mt CFR level reported last week. However, Vietnamese buyers’ target price for this grade is at $525/mt CFR for now.
Japanese suppliers are bullish as they still enjoy strong demand locally and it is expected prices will keep going up. Better demand for higher grades like shredded and shindachi in South Korea have pushed up ex-Japan prices. But the SteelOrbis reference price for H2 this week stands at JPY 52,000-54,000/mt ($458-473/mt) FOB, widening by JPY 500/mt, with the higher end of the range corresponding only to some bids from South Korea. At the same time, the general level seen as the tradable for Vietnam is close to the higher end of the range.
Also, there are ex-US HMS I/II 80:20 scrap offers to Vietnam at $550/mt CFR, while the tradable prices have also increased, to $535-540/mt CFR. “Asian buyers are looking for US scrap, so they [Vietnamese importers] will have to pay higher,” a trader said. The previous deals for ex-US I/II 80:20 scrap in Vietnam were at $516-525/mt CFR early this month.
Meanwhile, local scrap procurement prices in Vietnam have increased by approximately $5/mt week on week, pushing H1 and H2 grade scrap prices to VND 12,300/kg ($535/mt) and VND 12,000/kg ($522/mt), respectively.
The easing of measures against Covid-19 in Vietnam are interpreted as positive developments for the steel industry.