Vietnam’s Imported Scrap Market in Early August 2026: Japanese Scrap Prices Fall on Currency Pressure, While Trading Remains Cautious

The Asian ferrous scrap market entered early August 2026 with a clear downward price trend as the sharp depreciation of the Japanese yen put pressure on domestic scrap prices in Japan as well as export offers. Against this backdrop, Vietnamese steelmakers have remained cautious, preferring to delay purchases as they anticipate that prices may continue to soften in the near term.

Tokyo Steel, Japan’s largest electric arc furnace (EAF) steel producer, reduced its domestic scrap purchasing prices on both August 4 and August 5. This marks one of the rare occasions in recent years that the company has implemented two consecutive price cuts within such a short period, reflecting the impact of the weakening yen, which has traded near its lowest level in decades against the U.S. dollar. Following these adjustments, domestic scrap prices in several regions of Japan fell below JPY 50,000 per tonne, leading export offers to Southeast Asia, including Vietnam, to decline accordingly.

Market analysts believe that exchange rate movements are currently playing a greater role than supply-demand fundamentals in determining prices. A weaker yen provides Japanese exporters with additional flexibility to lower FOB prices while maintaining competitiveness in overseas markets. At the same time, steel producers continue to face sluggish finished steel demand, limiting any meaningful recovery in scrap prices despite relatively balanced domestic supply conditions.

In Vietnam, trading activity has remained subdued. Many importers are waiting for the results of the August Kanto Scrap Export Tender, widely regarded as a key benchmark for Japanese and Asian scrap markets. Expectations that the tender price could decline further have encouraged buyers to postpone new bookings while also monitoring currency movements before making procurement decisions.

Beyond pricing considerations, the raw material strategy of Vietnamese steel producers has also begun to shift. The increasing availability of imported steel billet has provided mills with an alternative feedstock, reducing their dependence on imported scrap during a period of compressed production margins. A similar trend has emerged in South Korea, where steelmakers have significantly increased billet imports throughout 2026, leading to a noticeable decline in regional scrap demand.

According to Japan Customs statistics, Vietnam remains the largest importer of Japanese ferrous scrap, followed by Bangladesh and South Korea. From Vietnam’s perspective, Japan continues to be the country’s largest supplier of imported scrap since the beginning of 2026, ahead of the United States, Hong Kong, and Australia. These figures underscore Japan’s continuing strategic role in Vietnam’s steel scrap supply chain, despite the recent slowdown in trading activity.

International market analysts suggest that the scrap market is currently searching for a new equilibrium. According to Argus, Vietnamese demand appears to have reached a temporary bottom after several months of cautious purchasing and could gradually improve as construction activity strengthens after the rainy season. However, any meaningful recovery will largely depend on finished steel demand, China’s steel market performance, and the outcome of upcoming Japanese scrap export tenders.

Most experts therefore expect imported scrap trading to remain relatively quiet during the first half of August. Prices are likely to stay under pressure if the Japanese yen remains weak and regional steel mills continue to refrain from replenishing raw material inventories aggressively. Nevertheless, should steel consumption recover after the rainy season and inventories decline at steel mills, the market could gradually stabilize during the latter part of the third quarter.

Source: ThitruongThep, Tokyo Steel, and information compiled from publicly available internet sources.