Japan: Domestic scrap prices continue to head north

Japanese scrap prices continued a northward trajectory this week. Japan's leading mill, Tokyo Steel, increased its scrap purchase price for the third time in Sept'21. The company raised bids by up to JPY 2,000/tonne (t) ($18/t) for four of its steelworks, effective 22 Sep'21. However, prices for the Utsunomiya works remained unchanged.

Post-revision, the company's bid price for H2 scrap is JPY 50,000/t ($456/t) for the Tahara steelworks, JPY 49,000($447/t) for Takamatsu, and JPY 52,000/t ($474/t) each for Okayama and Kyushu.

Source: Tokyo Steel
Prices in JPY

• Japanese scrap export market less active: Increasing domestic demand in Japan kept Japanese suppliers active in the market. Additionally, the significant hike in freight rates created an obstacle for the other Japanese scrap buying countries like Vietnam, Taiwan, Bangladesh, and South Korea.
  
  

However, despite the hike in imported scrap prices, Vietnamese are actively inquiring about Japanese scrap offers. With easing of lockdown in Vietnam, market activities have picked up from the last two weeks. A few transactions for bulk booking are heard to have been concluded recently.

SteelMint's assessment for Japanese scrap export offers stand steady at JPY 47,500/t FOB. No recent deal is heard to have been concluded.

• Vietnamese mills active in booking bulk scrap cargoes: Vietnam-based mills remained active in booking bulk scrap cargoes. A bulk cargo containing 3,000 t of H2 grade scrap was booked earlier this week at around $485/t CFR Vietnam. However, current offers are at $485-490/t CFR.
  
  
• Japanese scrap offers to Bangladesh up further: Japanese scrap export offers into Bangladesh moved up further by $10/t. However, deals remained absent on increased offers, sources informed SteelMint. Increased freight rates and domestic Japanese demand lifted scrap export prices from Japan. Fresh indicative prices for Japanese H2 are at $580-585/t CFR Chittagong levels.
  
  
• China's ferrous scrap import market quiet: China's ferrous scrap import market remained mute as deals slowed down from Japan, as per latest updates received by SteelMint. Bids from Chinese buyers increased w-o-w for heavy recycled scrap (HRS101 grade). Bids for HRS101 scrap are at $530/t on CFR basis. Offers, on the other hand, are at $575-580/t CFR, unchanged compared to last week.
  
  
• South Korean buyers silent: South Korean scrap buyers stayed away from booking any fresh cargoes due to discrepancies in bids and offers. Interestingly, South Korean steel mills did not bid for Japanese scrap this week.
  It would be interesting to see if domestic prices see a further upturn in the coming days.