Vietnamese scrap metal importers badly hit by new 20% deposit rule

 

BEIJING (Scrap Monster): According to newspaper reports, Vietnam government proposes to implement a new rule which makes it necessary for scrap importers to deposit money equivalent to up to 20% of the value of the imported cargo, prior to importing the material to the country. Industry sources indicate that the new deposit rule is likely to go effective June 15th this year. Vietnam Economic Times fears that the new rule may badly hit scrap importers in the country as many of them are small players, who may find it difficult to deposit the money upfront.

 

As per data released by the Vietnam Steel Association, almost 90% of the country’s steel output in 2014 had come from scrap. The Vietnamese steel output had touched nearly 6 million tonnes during the year. Also, imported scrap had accounted for 60% of the total scrap demand by steel making industry during the year. Since the country’s steel output depends heavily on imported scrap, any policy change that impacts scrap importers may hurt the entire industry.

 

As per latest government data, Vietnam’s scrap imports totaled 201,000 tons of scrap during the month of February this year. This is 13.5% higher when compared with the imports during the month before. The scrap imports by the country had totaled 178,000 tons during Jan ‘15.

 

The import value generated by scrap during Feb ‘15 amounted to US$61.61 million. The ferrous scrap import value climbed higher by 9.10% from the previous month. The total value generated by scrap imports had touched $56.529 million during Jan ‘15.

 

The cumulative scrap imports by the country during the initial two months of the year totaled 379,000 tons, 3.9% higher when compared with imports during the corresponding two-month period in 2014. The scrap import prices averaged at around $311.60 per ton during the first two months of the year.