VIETNAM SCRAP: Buyers halt purchases after sellers raise offers

Bids for bulk cargoes of Japanese H2 scrap were at $245 per tonne cfr southern Vietnam this week, with offers at $250 per tonne cfr southern Vietnam at the start of the week.

There was a transaction at $248 per tonne cfr southern Vietnam to a Vietnamese steel mill on Tuesday or Wednesday, while another transaction was concluded at $247 per tonne cfr southern Vietnam on Thursday.

Offers increased to $255-260 per tonne cfr southern Vietnam by Thursday and Friday from $250 per tonne cfr southern Vietnam earlier in the week, after optimistic traders raised their offers after major Japanese mini-mill Tokyo Steel announced it would increase its bid price.

The electric-arc furnace-based producer increased its bid by ¥1,000 ($9.29) per tonne at all steel works. It is now paying ¥19,500 per tonne at Tahara works, ¥18,500 per tonne at Okayama works, ¥18,500 per tonne at Kyushu works, ¥19,500 per tonne at Utsunomiya works and ¥17,500 per tonne at Takamatsu works.

Buyers in northern Vietnam were negotiating for bulk Japanese H2 scrap at $255-259 per tonne cfr in the earlier part of the week, with offers at $260 per tonne cfr northern Vietnam.

“It will take time for buyers to digest the new offers. But they will have to purchase at higher prices next week if they need quantities,” an optimistic Vietnamese trader told Fastmarkets on Friday.

Cargoes of H1&H2 (50:50) were offered at $270 per tonne cfr Vietnam.

Bids for bulk cargoes of Japanese HS were at $280 per tonne cfr Vietnam, against offers at $280-285 per tonne cfr Vietnam. Bulk Japanese Shindachi was offered at $285-290 per tonne cfr Vietnam.

The higher offers are in line with the higher domestic prices in key supplier Japan.

“Many Japanese shippers have to start bidding higher for domestic scrap so that they can gather enough quantities to ship to buyers in Asia,” a Japanese trader told Fastmarkets.

Fastmarkets’ weekly price assessment for steel scrap H2, Japan-origin import was $247-248 per tonne cfr Vietnam on Friday, narrowing by $2-3 per tonne from $244-250 per tonne cfr a week earlier.

“Offers have indeed increased this week but it remains to be seen whether this is sustainable. A major rebar producer in Vietnam has cut its rebar offers by 150 dong per kg ($6.40 per tonne),” a second Vietnamese trader told Fastmarkets on Thursday.

The producer is now offering rebar at 10,500-10,700 dong per kg on a theoretical weight basis.

Offers for bulk cargoes of United States’ West Coast-origin HMS 1&2 (80:20) were at $263 per tonne cfr Vietnam this week, unchanged week on week. Shredded scrap was offered at $268 per tonne cfr while plate and structural scrap was offered at $273 per tonne cfr Vietnam.

Another bulk shredded cargo from the US’ West Coast was offered at $270 per tonne cfr Vietnam.

There was limited demand for deep-sea cargoes after at least one 35,000-tonne cargo from the US’ West Coast was sold at $257 per tonne cfr Vietnam last week. There was market chatter that another deep-sea cargo from Australia was also concluded at the same price, although this could not be confirmed.

Fastmarkets’ weekly price assessment for deep-sea bulk cargoes of steel scrap, HMS 1&2 (80:20), cfr Vietnam was $257 per tonne on Friday, unchanged week on week.

Bids for containerized ferrous scrap from the US were at $220 per tonne cfr Vietnam, while offers were at $235-240 per tonne cfr Vietnam.

“Containerized scrap buyers are able to wait for price drops this week,” the second Vietnamese trader said.