Vietnamese scrap market remains weak, S. Korean mills cut utilization rates

Friday, 26 April 2024 17:08:35 (GMT+3)   |   Istanbul
       

The scrap market in Vietnam shows little appetite for import scrap but there is hope for a recovery. According to Vietnamese sources, there is some demand for steel in the country. Billet prices are also rising, at a slow pace. “If it can last long, then steel mills may have to import more scrap. Until then, we expect the import side to remain weak,” a Vietnamese source commented. South Korea is also relatively silent: domestic scrap prices are declining in the country due to lower capacity utilization rates.

SteelOrbis has learned that Japanese H2 scrap offers to Vietnam have softened a little on the upper end by $3/mt week on week and are currently in the range of $375-377/mt CFR. Vietnamese sources report that bids for this grade remain at around $370/mt CFR. “There has been one deal done at $370/mt CFR Vietnam for this grade, but the purchase price was not high,” a Vietnamese scrap trader commented this week.

Offers for ex-US bulk HMS I/II 80:20 scrap are now at $390-395/mt CFR Vietnam, moving up from $385-390/mt CFR. Containerized ex-US HMS I/II 80:20 scrap prices stand at $365/mt CFR, while ex-US P&S scrap offers are at $375/mt CFR. Vietnamese buyers do not show much interest in these offers received from the US.

Indications for ex-US HMS I/II 80:20 bulk cargoes for South Korean buyers are at around $400/mt CFR. According to sources, there is no demand for ex-US cargoes since domestic scrap prices in the country are more attractive, with South Korean producers refraining from spot purchases. South Korean mills are still cutting their production rates and a further decline is foreseen for May. A South Korean source at a major producer said, “There was a news article about some of the small and medium-size companies going bankrupt, and it may be a signal for a crisis at the major construction companies."

SteelOrbis has also heard that bid prices of South Korean steelmakers for Japanese scrap are now at around JPY 50,500/mt ($322/mt) FOB, considered reasonable by buyers but sellers are hesitating to sell.

This week, the depreciation of the Japanese yen against the US dollar has had a significant impact on prices. Over the past week, the Japanese yen has moved from 151.38 to the dollar to JPY 156.88. Therefore, SteelOrbis’ reference price for ex-Japan H2 scrap has moved up on Japanese yen-basis from JPY 49,500-51,500/mt ($327-340/mt) FOB to JPY 51,400-53,350/mt ($328-340/mt) FOB. Almost no change has been observed in the dollar-based prices. The lower end of the reference price is represented by the deals done by Taiwan and the upper end is represented by Vietnamese buyers’ bookings.

$1 = JPY 156.88


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