Vietnam's ferrous scrap imports have fallen to a 10-month low, reflecting a slowdown in the country's steel industry. In May, Vietnam imported only 296,000 tons of scrap, a decrease of 27% compared to April and 2% compared to May 2023. This decline follows a period of higher import volumes between February and April.
The weakness in scrap imports is attributed to a combination of factors. Firstly, Vietnam's domestic steel market faces continued challenges, with hot-rolled coil prices hovering near three-year lows. This pressure on local steelmakers has led them to reduce sales prices to compete with cheaper imports, particularly from China. Secondly, the real estate industry shows no signs of improvement, further dampening demand for long steel products.
The source of scrap imports has also shifted. Shipments from the United States have fallen dramatically, dropping 72% year-on-year in the first five months of 2024. Vietnamese steelmakers are increasingly opting for smaller cargoes from nearby locations like Japan and Hong Kong, which have seen import increases of 53% and 48% respectively during the same period.
Trade sources predict that Vietnam's scrap imports will likely remain subdued in the coming months due to sufficient domestic scrap availability and a declining global demand for seaborne steel.
