Vietnam scrap imports slow in September
Vietnam's ferrous scrap imports slowed in September as higher prices cooled buying appetite, but demand is expected to remain firm for the rest of the year as steel output rises.
Total imports fell by 28.9pc to 485,625t in September from August and by 33.3pc from a year earlier. January-September imports rose by 1.3pc from the same period in 2019.
Lower imports from main suppliers Japan and the US accounted for the decrease in imports. August imports rose to a high of 2020 so mills had built enough inventory during the restocking cycle. Export prices from the US and Japan trended upwards during the period to book cargoes for September arrival, moving buyers' attention to domestic scrap purchases.
Vietnam is the only large steel producer, other than China, to significantly increase steel output this year, raising its appetite for steel feedstocks including ferrous scrap. Vietnam's January-August steel output rose by 11.5pc to 15.4mn t, according to Worldsteel data.
Vietnam Steel Association (VSA) member mills increased September output by 2pc from August and by 21pc on year to 2.35mn t. VSA members also stepped up exports by 7.7pc from August and by 36.5pc from a year earlier to 497,535t in September. Vietnam is expected to be the only southeast Asian country to achieve positive GDP growth in 2020. Increasing scrap demand and higher acceptable prices compared with other markets have made Vietnam a vital buyer for many traders in Asia.
Imports from Japan fell by 9pc on the month to 290,728t but were 35.4pc higher than a year earlier. Japanese imports are up by 58pc, year to date.
Rising domestic demand in Japan lifted prices above Vietnam's target levels. H2 purchase prices at Tokyo Steel's Utsunomiya plant rose by ¥4,500/t ($42.70/t) from the middle of July to the end of August on strong scrap demand from domestic steel mills. Many suppliers moved allocations to the domestic market after overseas buyers became inactive.
Imports from the US plummeted by 43.2pc to 84,548t in September with two deep sea cargoes and the rest containerised. The Argus HMS 1/2 (80:20) containerised cfr Taiwan price started to increase from the middle of July. Rising prices and uncertainty about the market for finished products in July kept Vietnamese mills away from US scrap, which typically requires longer lead times for arrival.
Imports from Hong Kong remained stable, while there were no imports from Australia imports.
| Vietnam's ferrous scrap imports | t | ||||
| Country | Sep | % ± vs Aug | % ± vs Sep '19 | Jan-Sep | % ± on year |
| Japan | 290,728 | -9 | 35.4 | 2,390,827 | 58 |
| US | 84,548 | -43.2 | -77.9 | 659,779 | -40.6 |
| Hong Kong | 39,125 | 0.2 | -18.9 | 326,597 | 18.8 |
| Australia | 0 | -100 | -100 | 211,372 | -45.6 |
| Others | 71,224 | -42.7 | -36.9 | 724,193 | -25.2 |
| Total | 485,625 | -28.9 | -33.3 | 4,312,768 | 1.3 |
| Source: Vietnam Customs | |||||
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