Vietnamese EAF mills are turning to blast furnace billet amid the spike in scrap import offer prices, Kallanish notes.

Early this week, a parcel for 20,000 tonnes of domestic blast furnace billet for November shipment was ordered at $398/tonne cfr southern Vietnam, trading sources say. The EAF mill started buying billet because it is a cheaper alternative than to produce billet from scrap, a source close to the mill says (see Kallanish 23 October 2019).

Scrap suppliers have hiked offer prices in the past week or so. Offers of Japanese H2 scrap are prevailing at $265-270/t cfr Vietnam compared to $255/t cfr previously. A deal was struck at this level during the early part of the week beginning 21 October.

An EAF mill would need to source scrap at around $240/t to compete with billet priced at $400/t, a Vietnamese scrap trader says. “But now, no one can sell lower than $260/t,” he says. Another says that he has not heard of recent scrap import deals. “Finished products prices are not rising, so why pay higher for scrap?” he asks.

Bulk offers for deep-sea HMS 1/2 80:20 are prevailing at $275-280/t cfr Vietnam compared to $260-262/t cfr Vietnam last week.

Meanwhile, in Taiwan, limited cargoes of Japanese-origin H1/H2 50:50 closed this week at $255/t cfr, local Taiwanese traders report. Buying commenced a few weeks ago, so many cargoes will arrive in Taiwan in the coming days, a trader in Taichung says. But this buying has now slowed down considerably, he adds.