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Vietnam 2020 ferrous scrap imports hit record high of 6.27 million mt

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Vietnam 2020 ferrous scrap imports hit record high of 6.27 million mt


Japan still largest supplier, up 54.7% on year

Crude steel production capacities grow

Singapore — Vietnam imported 6.27 million mt of ferrous scrap in 2020, hitting a record high and making it the largest importer within Asia, latest preliminary custom figures showed.

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Japan remained its largest supply origin, accounting for 3.40 million mt, and up 54.7% year on year. US volumes totaled 1.03 million, down 16.5%, followed by Hong Kong (0.46 million mt, up 21.2%) and Australia (0.32 million mt, down 34.6%).

Vietnam's growing thrist for scrap came alongside increasing crude steel output, which in the first 11 months of the year surged 43.6% year on year to 26.61 million mt, according to the most recent figures from Worldsteel Association.

The bumper crude steel output was attributed to increasing blast furnace capacities, with the country's steelmaking giant Hoaphat firing up its third of four new furnaces at its Dungquat facility in 2020, with the fourth slated for startup this month.

The latest capacity addition came amid a string of blast furnace startups that followed since Formosa Ha Tinh's entry in 2016.

And despite the COVID-19 pandemic hammering the performances of major steel producing nations, overall output volume for steel of all kinds in Vietnam was relatively stable. The country produced 23.33 million mt in the first 11 months of the year, up just 1.0% over the same period of 2019, the most recent figures from the Vietnam Steel Association showed.

With its hunger for scrap, its regional neighbors are sensing a growing need to monitor Vietnam's prices closely, being the largest importer in Asia.

"They've surpassed even South Korea's volumes now," a South Korean trader said. "And I recall Japanese scrap prices, during the Q4 surge, were mostly supported by Vietnamese demand. We have to keep an eye on their market to prevent being blindsided."

The recent years of import growth have not been consistent though. Imports hit a nadir in 2018, when the country toughened its stance against receiving rerouted waste from China (as the latter began to close its doors to scrap imports). Strict and arduous customs inspections then led to huge financial losses as traders fought to clear mountainous backlogs of containers being held at ports.

Concurrently, with blast furnace output growing, Vietnam's electric arc furnace steelmakers are feeling more heat as pricing power for related steel product markets begins tilting towards the former, which tended to have greater production cost advantage.