27 May 2021 | 05:09 UTC

Vietnam's domestic light scrap prices see first dip in 29 weeks as seaborne prices fall

Domestic light ferrous scrap prices in southern Vietnam slipped in the week to May 27, snapping a 29-week bull run, amid falling seaborne scrap and billet prices.

Bids for 1-3 mm thick scrap, similar to Japanese H3 material, delivered to mills in Vietnam's south were heard at Dong 10,450-10,550/kg ($454-$458/mt) May 27, slipping from Dong 10,500-10,600/kg a week earlier, market sources said.

"Regional [scrap] prices are coming down hard, pulled down by weak sentiment in the Chinese market. Some mills here were mostly in a wait-and-see mode for the past week, but now it has become more evident that billet prices cannot return to the previous levels of $770-780/mt CFR China," a local Vietnamese steelmaker said, adding: "Even local billet prices here have fallen $100/mt within a week. Scrap prices will eventually catch on with the fall as well."

Vietnamese traders similarly expected weak buying and further downside to continue in the local and seaborne markets at least in the short run, until steelmakers were either able to see a slower fall or a return in Chinese demand for seaborne billet.

Import offers from Japan were also seen lower this week, with H2 material at $490-$497/mt CFR, slumping from $435/mt and above a week ago.

"Japanese light scrap prices are expected to remain bearish for now, but heavy scrap grades might be more resistant, or at least see a softer correction, due to their firm demand in Japan," a Japanese trader said. "Regional buyers now are either in wait-and-see mode or are just trying to slash their bids."

The recent dip in Vietnamese domestic light scrap prices came after a bull run that stretched for 29 weeks from November 2020, resulting to surge from Dong 6,500-6,900/kg to a record high of Dong 10,500-10,600/kg, according to S&P Global Platts data.

Vietnam's domestic construction steel product prices were heard to have continued to trade sideways in the week to May 27, amid some caution following the slump in billet and raw material prices, sources said.

"Mills are trying to keep product prices steady, but in addition to falling billet and scrap prices putting pressure on the products market, the wet weather in the south is not helping either," a Vietnamese trader said.


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