“The proposal to increase export taxes on billet and reduce import taxes on finished steel products is not suitable with the current situation of steel production,” the association said.
This was in response to domestic demand for steel falling sharply amid the Covid-19 pandemic since April 2021, especially with less construction and industrial activity.
“Domestic sales of finished steel products had fallen by 20% in June 2021 compared with May,” the association said.
There is also excess steel in Vietnam, especially with domestic steel sales hitting 10 million tonnes, leaving an excess of 4 million tonnes which needed to be exported, it said.
“Expanding the export market is very necessary to boost production, improve investment efficiency and create jobs for hundreds of thousands of workers,” the VSA said.
Vietnamese billet is regularly sold to major buyers in China and Southeast Asia. Fastmarkets’ steel billet, import, cfr China
was assessed at $705-718 per tonne cfr China on Friday, up from $703-715 last week, while the steel billet import, cfr Manila
assessment was at $700-715 per tonne, up from $695-705 per tonne previously.
Vietnam’s Ministry of Finance proposed to increase export taxes on billet
and cut import taxes on some iron and steel products by 5-10% last week, causing widespread expectations of a billet supply shortage in Asia.
The tax changes have not been imposed yet, but the proposal has added to the pessimistic sentiment already present in the scrap market if Vietnam’s billet export volumes were to ease, market sources said.
Zero interest in imported scrap
Market sources reporting almost zero interest in imported scrap during the week to Friday July 23.
Offers for bulk Japanese H2 were mostly at $480 per tonne cfr Vietnam, down $10-20 per tonne week on week. There were also offers at $500 per tonne cfr northern Vietnam, but this was considered by market participants to be higher than spot market prices.
Offers for bulk Japanese shredded scrap were at $550 per tonne cfr Vietnam, while offers for Hong Kong-origin H1&H2 (50:50) were at $480 per tonne cfr Vietnam.
There was no interest heard for obsolete scrap due to the poor downstream situation caused by the worsening Covid-19 pandemic, sources said.
Vietnamese steel mills that are still running their meltshops were mostly purchasing domestic scrap and eschewing imports due to the “large price gap” between them.
“Domestic long steel demand is extremely poor due to the Covid-19 pandemic,” a steel mill source in Vietnam told Fastmarkets.
Southern Vietnam has been under strict lockdown since July 13 due to the growing number of Covid-19 infections, including in Ho Chi Minh City and some its surrounding areas.
Fastmarkets’ weekly price assessment for steel scrap H2, Japan-origin import, cfr Vietnam
was $480 per tonne on Friday, down by $4 from $484 per tonne the previous week
There were offers heard at $520 per tonne cfr Vietnam for bulk heavy melting scrap 1&2 (80:20) from the United States, against bids at $500 per tonne cfr Vietnam.
Market sources said prices were unchanged due to the poor demand.
Fastmarkets’ weekly price assessment for deep-sea bulk cargoes of steel scrap, HMS 1&2 (80:20), cfr Vietnam
was $510-515 per tonne on Friday, unchanged from a week earlier.