Vietnam's ferrous scrap imports fell sharply in August as domestic steel demand was muted by lockdown measures from the end of June. Imports in August almost halved from July to 368,500t, taking January-August imports to 4.53mn t and resulted in a year-on-year gain of 18.5pc, Vietnam customs data showed. Supply from all major sellers, except Hong Kong, fell significantly in August. Vietnamese buyers were cautious to place new seaborne scrap orders as they knew that domestic steel sales would be heavily affected during lockdown. Lockdowns in south Vietnam started at the end of June and will only ease gradually from the end of September. Steelmakers stayed on the market sidelines in July-August, so Vietnam's imported scrap volume is expected to remain low until October. Vietnamese buyers became active again in September on billet export orders from China. Chinese buyers bought significant volumes of billet from Vietnam when China's policy on production cut became clearer and were implemented strictly by the Chinese government. As Vietnam domestic steel demand is unlikely to recover immediately from ease of lockdown, Vietnam's demand for seaborne scrap continues to depend on the strength of the Chinese billet market.
Japan was the biggest supplier to Vietnam but fell to second place for the third consecutive month. Japan's sustained domestic demand curbed suppliers' interest to export, given a wide price gap between domestic and export prices. Japanese domestic scrap price also retreated from the peak since early July on weaker scrap demand in southeast Asia, but maintained a minimum of a $15/t premium over export prices. US rose to the top position as US suppliers allocated more resources to export, given sufficient scrap availability. Vietnamese buyers also preferred US containerized scrap when production was at minimum levels, as containerized scrap prices were much more competitive than those of bulk cargo.