Vietnam steel scrap price might fluctuate again due to supply fears caused by the new coronavirus strain found in the United Kingdom.
The new strain of coronavirus raises scrap price, also drives the fear of supply shortage
With the new strain of coronavirus found recently in the United Kingdom, the situation of scrap collection is harder in Europe and wherever it spreads to. “This might reduce the supply to markets such as Vietnam”, a Japanese trader said.
Therefore, many key suppliers such as scrap yards in the United States and Japan have been increasingly hesitant to offload materials. On account of the rising prices, they are expecting that prices will continue to increase in the near term.
This week, offers for bulk Japanese H2 cargoes were heard at $470-480 per tonne cfr Vietnam. This is up by $20 per tonne from $450-460 per tonne cfr Vietnam last week.
There was talk in the market of a transaction at $460 per tonne cfr Vietnam. However, sources said this was below market levels and might be a seller who was eager to raise the price. After seeing steep price falls in the Chinese steel market, anyone is ready to pay to offload cargo.
Japanese scrap yards could accept $465-470 per tonne cfr Vietnam in the earlier part of the week, but that price had increased toward the end of the week.
A Japanese trader shared that “The domestic markets in Japan are very strong, especially in the Kanto region. Scrap yards are in no hurry to sell cargoes in the export markets”.
Scrap volumes might shift into domestic markets instead of international trading
Due to the higher margins in the domestic market, sellers are looking to shift more volumes here. Especially for the major Japanese mini-mill Tokyo Steel who increased scrap purchase prices again this week.
In 24 days, it has raised 10 times amid tight domestic supply and a booming steel market in Japan.
With that being happening, the steelmaker increased the purchase price by ¥2,000 ($19.32) per tonne to ¥43,000 per tonne at Utsunomiya steelworks. At Tahara steelworks, it is now ¥43,500-44,500 per tonne & ¥43,500 per tonne at Okayama steelworks. At Kyushu and Takamatsu steelworks, it’s ¥41,000 per tonne.
Buyers said bulk Japanese HS had been offered to them at $490 per tonne cfr Vietnam in the earlier part of the week. However, they were targeting sales at $500-510 per tonne cfr Vietnam. For now, offers later fell to $475 per tonne cfr Vietnam by Thursday. It was up by $15 per tonne from $450-455 per tonne cfr Vietnam on December 18.
Meanwhile, bulk shipments of HMS 1&2 (80:20) from the United States’ West Coast were offered at $500-505 per tonne cfr Vietnam. It is up by $35-40 per tonne from last week. Bids were at $480 per tonne cfr Vietnam.
Market activity for these cargoes has been thin in the past week. Buyers said they have high inventory levels and therefore would prefer to purchase Japanese scrap instead of bulk cargoes with long shipping times. The deep-sea bulk cargoes of steel scrap, HMS 1&2 (80:20), cfr Vietnam was $480-500 per tonne on Thursday. It increased by $20-30 per tonne from $460-470 per tonne on December 18.