Japan: Absence of firm overseas bids weighs down scrap prices

Japanese scrap offers continued to decline for yet another week. The fall in export prices is weighing on Japan's domestic prices as well. SteelMint's assessment for Japanese H2 scrap export prices stands at JPY 57,000/t ($445/t) FOB, down by JPY 3,000/t ($23/t) w-o-w.

Market overview

• Major South Korean mills continue to keep away from import bookings: Japanese scrap suppliers are under continuous pressure as shipments to major buyers, ie, South Korea and Vietnam, fall. Hyundai and POSCO have remained away for more than a month from bidding on H2 scrap.
  
  

However, mid-week, a steelmaker in Korea signed a contract for Japanese H2 at JPY 62,500/t ($488/t) and Shindachi bara for JPY 67,000/t (524) CFR. But, the arrival price of H2 is still higher compared to Korean domestic materials. Market insiders are expecting further drop in Japanese export offers which can lead to a significant impact on domestic prices as well.

Hyundai Steel had last presented its bids for Japanese scrap on 7 April, 2022. Bids for H2 scrap stood at JPY 66,000/t, while those for Shindachi bara were at JPY 73,500/t FOB.

• Lower bids from Vietnam continue to pull down offers: Fresh offers for bulk Japanese H2 scrap dropped further by $10/t to $500/t CFR Vietnam against offers seen earlier this week. Prices have hovered at over three-month lows on subdued market sentiments.
  
  
• Japanese scrap out of reach of Bangladesh mills: Japanese H2 material is still on the higher side at $550/t CFR Chittagong levels. The country's bulk scrap buyers are waiting for further price directions. However, buyers managed to book a couple of US-origin bulk cargoes at lower offers last week.
  
  
• Tokyo Steel cuts scrap prices thrice this week by $27/t: Tokyo Steel has cut scrap buy prices three times this week. The company has reduced bids by a total of up to JPY 3,500/t ($27/t) for all its steelworks. The current company's bid price for H2 scrap stands at JPY 59,000/t ($461/t) delivered to Tahara, while prices for Utsunomiya are at JPY 59,500/t ($465/t).
  
  

Notably, prices have hit a three-month low amidst absence of firm overseas bids.