Growth in steel production capacity drives Vietnam’s scrap appetite

Vietnam has seen ferrous scrap imports ‘explode’ in December as buyers ‘aggressively’ restocked during a rally in global ferrous markets, pushing full-year imports above six million tonnes for the first time, reports commodity markets platform Argus Media.

Vietnam’s 2020 ferrous scrap imports increased 11% to 6.27 million tonnes, according to customs data. Imports from its main supplier Japan climbed to 3.4 million tonnes, making Vietnam the biggest consumer for Japanese scrap in 2020, a position previously claimed by South Korea.

The country’s growing steel capacity and crude production levels have driven this higher demand for scrap. Vietnam quickly controlled the spread of Covid-19 and that in turn has stimulated the economy to support the steel demand. Crude steel output from January to November increased by 44% to 26.6 million tonnes.

Many Vietnamese steel manufacturers have also benefited from China’s strong purchasing appetite for semi-finished steel since April 2020. Vietnam exported nearly three million tonnes of semi-finished product to China in 2020, more than seven times the 2019 volume, reports Argus.