Vietnam domestic scrap prices fall, South Korean Light A prices decline

Type 1 or H2-equivalent 3-6 mm scrap prices in northern Vietnam fell to Dong 8,700-9,300/kg ($343-$367/mt) in the week to Nov. 27 amid sluggish demand. Meanwhile, southern prices for the same grade declined to Dong 8,300/kg ($327/mt), according to market sources.

Vietnam domestic scrap prices fell in the week to Nov. 27 amid lukewarm demand and lackluster growth in the Vietnamese economy. According to market participants, EAF and IF steel mills are stocking up inventory levels on a need-to basis to avoid bearing additional risk from holding a surplus in inventory.

"[Domestic scrap demand] is stable. [It] should be higher as the rainy season [has stopped], but it stays unchanged at a low level ... Scrap demand stays close to downstream demand. Mills are not taking risks by stocking up more than necessary. Nobody is maintaining high inventory ... [But] BFs might be the exception as they have to run continuously," said a Vietnamese mill source.

Looking ahead, sources expressed bullish spot pricing sentiments while continuing to monitor for an uptick in construction steel demand post Vietnam's rainy season.

"The was still construction during rainy season. [But] the conditions for construction are just not very good and people try to get as much done as possible during [the] dry season," said the same mill source.

In Japan, domestic FAS collection prices for H2 grade remained rangebound on the week at Yen 41,500-43,000/mt Nov. 27.

Platts, part of S&P Global Commodity Insights, assessed the weekly H2 ferrous scrap price down Yen 2,000/mt on the week, at Yen 43,000/mt ($284/mt) FOB Tokyo Bay Nov. 27.

South Korea sees lower scrap demand

The price of H2-equivalent Light A grade scrap in South Korea lowered to Won 345,000/mt ($247/mt) in the week to Nov. 27, from Won 360,000/mt last week. Meanwhile, Heavy A remained rangebound at Won 375,000-390,000/mt ($269-$279/mt), from Won 385,000/mt last week, according to market participants.

Looking ahead, some sources remained bearish toward domestic spot prices in the near term, citing subdued demand for steel products amid the approaching winter season and a sluggish economy.

"[Domestic sentiments] are still bad. There are no factors [for demand] to rebound. It is a time when demand decreases due to seasonal factors (winter). I don't think demand [is] going to be good until next year," said a South Korea-based trading source.

Downstream, sources expressed similar bearish sentiments towards demand in the upcoming winter.

"Rebar makers' operation ratio is 30%-40% only. Additionally, [when] winter comes, demand [is expected to move] down further," said a South Korea-based mill source.

Meanwhile, a South Korean mill was heard maintaining bid levels for HS at Yen 50,000/mt ($329/mt), Shredded at Yen 49,000/mt ($323/mt) and raising bid levels for Shindachi Bara at Yen 50,000/mt ($329/mt) CFR Korea on Nov. 28.