Vietnam's scrap imports stay firm in October

Vietnam's scrap imports rebounded in October as steelmaking in the country received support from sustained steel exports to China, offsetting weaker domestic sales.

Total imports in October rose by 14.1pc to 554,239t from September, taking January-October imports up by 3.3pc on the year to 4.87mn t, according to Vietnamese customs data.

Imports from its two top suppliers increased. Japanese imports rose by 10.4pc to 321,095t from September, with cargoes mostly booked from the middle of August to the middle of September. Imports from the US rose by 22.6pc to 103,683t from September and were mostly booked in August.

The increase in imports came on a rally in global scrap markets. Prices for all origins increased over August-September given higher demand and tight supply. Japanese scrap prices have been on the rise since the middle of July with the restart of Japanese auto plants lifting domestic demand. The Argus HMS 1/2 (80:20) containerised cfr Taiwan assessment rose by $21/t in August. Vietnamese buyers had no choice but to increase purchase prices to secure sufficient tonnage for production.

Vietnam's higher scrap demand was mainly driven by its steel exporters, with margins sufficiently wide to absorb prices of imported raw material. Vietnam became the biggest billet supplier to China in September, according to Chinese customs data.

Smaller mills that focused on domestic sales failed to absorb the higher scrap prices given tepid demand and lagging prices for finished steel in Vietnam, keeping them out of seaborne scrap markets and relying on domestic scrap instead.

Steel output for Vietnam Steel Association member mills in October remained the same from September and rose by 11.7pc on the year to 2.39mn t. Sales across these mills fell by 14.8pc from September. Heavy rains and a tropical storm hit central Vietnam in early October, causing severe flooding and landslides that depressed steel demand. Domestic construction steel demand is expected to gradually recover as the monsoon season ends in November and reconstruction projects from the floods add to demand.

Imports from Australia were at 51,888t, after there were no imports in September. Imports from Hong Kong decreased by 22.1pc on the month to 30,471t.

Vietnam&#39;s ferrous scrap imports t Country Oct % &#177; vs Sep % &#177; vs Oct &#39;19 Jan-Oct % &#177; on year Japan 321,095 10.4 33.7 2,711,922 54.7 US 103,683 22.6 157 763,462 -33.7 Australia 51,888 N/A -9 263,260 -40.9 Hong Kong 30,471 -22.1 -32.4 357,068 11.6 Others 47,102 -33.9 -35.6 771,295 -26 Total 554,239 14.1 21.6 4,867,007 3.3 Source: Vietnam Customs

Related News