Vietnamese demand for ferrous scrap from Japan picked up this month after an investigation into safeguard measures against imports of billet and long products was launched by the Vietnamese govermnent on December 25.
EAF mills are preparing to boost their scrap-based operations and ordering Japanese scrap, which is competitively priced compared with other origin scrap, trading sources said.
Booking prices for Japanese H2 scrap concluded at $173-175/mt CFR Vietnam for end-February shipments recently, trading sources in Vietnam said Tuesday. A Hanoi trader said that he sold 20,000 mt of material since end of last week at this level.
Prices of H2 scrap were prevailing at around $165/mt CFR Vietnam during December 21 week.
Offers from H1/H2 50:50 scrap from Japan were up to around $184/mt CFR.
No bookings had taken place at this level yet because Vietnamese customers wanted to pay the maximum of around $180/mt CFR, traders said.
A Vietnamese mill recently ordered this scrap mix at $179/mt CFR on Friday. H1/H2 50:50 scrap prices are typically $5/mt higher than H2 grade scrap to Vietnam.
However, the run-up in Japanese scrap prices to Vietnam could slow down.
The first trader said that bid prices for H2 were now lower at $170/mt CFR.
"They booked enough scrap," he said.
A second trader said that the mill which booked the scrap on Friday believed that any further price increases for Japanese scrap would only be a couple of dollars more. Although offer price levels are higher now, the mill was receiving "a high volume of offers now," the trader said.
A regional scrap trader in Hong Kong said the Vietnamese mills could book more some scrap cargoes ahead of the the long Vietnamese holidays surrounding the Lunar New Year which commences February 8.
