After the long break they took from the import scrap segment, demand from buyers in Vietnam is recovering, pushing prices up for all segments. “Vietnamese mills have made a comeback and they are trying to secure some quantities before the long holidays,” a Vietnamese source commented. Import scrap prices are also impacted by the uptrend observed in the international scrap market, and the support coming from South Korea in terms of scrap demand.
Ex-Japan offers for H2 scrap to Vietnam have been reported at $380-385/mt CFR, up from the range of $375-380/mt CFR last week. This price translates to JPY 44,600-45,400/mt FOB. According to a Vietnamese scrap trader, “Japanese suppliers are being quiet ahead of the Kanto tender.”
While today’s Japanese H2 FAS prices are at JPY 44,000-44,500/mt ($320-324/mt) or JPY 45,000-45,500/mt ($327-331/mt) FOB, the Kanto scrap export tender will be opened tomorrow and the resulting prices are expected to be higher. Somewhat recovering demand from Vietnam and South Korea for Japanese scrap is supporting sentiment. As Japan has an advantage against the US in terms of delivery terms, market players consider a rise in export quotations is highly possible.
The SteelOrbis reference prices for ex-Japan H2 scrap have increased from JPY 43,000-45,000/mt ($315-330/mt - exchange rate at 136.31 to a dollar) FOB recorded last week to JPY 44,600-45,500/mt ($324-331/mt) FOB. The dollar equivalent of prices has increased by $9/mt on the lower end and by $1/mt on the upper end with the currency fluctuations taken into consideration.
Deals for ex-Hong Kong HMS I/II 50:50 scrap by bulk to Vietnam were closed at $370-373/mt CFR earlier this week, while offers were at $360/mt CFR last week without any bookings done. Currently, ex-Hong Kong offers for the same grade to Vietnam are in the range of $380-385/mt CFR, while some players are also waiting to see the result of the Kanto tender.
This week, offers of bulk HMS I/II 80:20 scrap cargoes from the US West Coast to Vietnam are at around $415-420/mt CFR, up by $15-20/mt as compared to last week. Also, offers for ex-US HMS I/II 80:20 scrap in containers are at $365/mt CFR, with some deals already closed at this level.
$1 = JPY 137.44