Vietnam’s ferrous scrap imports hit 10-month low in May

Vietnam's ferrous scrap imports continued to fall in May and reached its lowest level since July 2023, owing to lower scrap consumption in the country's steel market.

The country imported 296,000t of scrap in May, down by 27pc on the month and by 2pc on the year. This brought total imports for January-May down by 7pc on the year to 1.99mn t.

The decline in May's import volume was driven by higher arrivals in February-April and continuing weakness in the domestic steel market. Hot-rolled coil prices in Vietnam's domestic market remained near three-year lows at $535/t in May, as local steelmakers were forced to reduce sales prices to compete with cheaper China-origin coils. The long steel market faced similar challenges, with no signs of improvement in the real estate industry.

Imports from the US plummeted by 72pc on the year in January-May to 118,000t, marking the sharpest drop in shipments to Vietnam. This was because Vietnamese steelmakers opted for smaller cargoes from short-sea suppliers over deep-sea bulk cargoes from the US.

But imports of short-sea cargoes fromJapan and Hong Kong increased by 53pc and 48pc on the year, respectively in January-May. Japanese traders aimed to deliver more cargoes to Vietnam, as sales to South Korea and Taiwan dropped significantly given lower demand and more attractive scrap prices from other origins.

Vietnam's scrap imports are expected to remain subdued in the coming months given adequate domestic scrap availability and declining seaborne steel demand, according to many trade sources.