Japan: Export offers unchanged; buyers await Kanto scrap export tender outcome

Japan's scrap export offers remained unchanged w-o-w. However, the weakened national currency and cut-down in freight rates attracted buyers' attention. Prominent buyers like South Korea and Vietnam kept their bids unchanged.

SteelMint's assessment for Japanese H2 scrap export price stands at JPY 66,000/t FOB, stable w-o-w.

However, a month ago, it may be recalled, the overseas buyers had remained less interested due to a disparity in bids and offers, while Japanese suppliers also enjoyed domestic trading at high prices.

Buyers' market overview

• Hyundai Steel's bids for Japanese scrap remain unchanged: Hyundai Steel has kept bid prices unchanged this week as against the last set of bids presented on 31 March, 2022. Bids for H2 scrap stand at JPY 66,000/t ($534/t), while those for Shindachi bara are at JPY 73,500/t ($594/t) FOB. Amidst bulk scrap bookings from the US and a conservative outlook on new contracts, Hyundai has kept bids unchanged.
   

  Additionally, the company has recently signed a contract for US-origin scrap, as per a SteelDaily report. The cargo contains 45,000 t of HMS 1 scrap, booked for $625/t CFR. The material is expected to arrive in South Korea in May, 2022, SteelMint learned from sources.
  Another South Korean major, POSCO's purchase price of 304 stainless steel scrap increased by KRW 270,000/t ($221/t) on 6 April, 2022 from levels prevailing last year. However, market sources believe that this is a rumour, as per a SteelDaily report. Moreover, some large retailers are likely to raise prices by KRW 400,000/t ($328/t) from 15 April, 2022. POSCO has been continuing its contracts with US scrap suppliers. Traders explained that the mill is focusing on supply and demand rather than prices and importing one cargo per month.
  
  

• Offers for Vietnam unchanged: Vietnamese buyers were looking for favourable price opportunities to book fresh slots from Japanese suppliers. Bulk H2 scrap offers remained firm at $630/t CFR Vietnam, while bids for the same H2 grade are comparatively lower at $610-615/t CFR levels.
  
  
• Bangladesh buyers await clear price direction: South Asia's major bulk buyer, Bangladesh, is waiting for a clear price direction. Market participants believe prices will fall further. However, the Kanto tender may provide some clarity on fresh offers. Recently three bulk cargoes were booked from the US at $680-685/t CFR levels.
  
  

Tokyo Steel raises scrap purchase prices by JPY 500/t ($4/t): Tokyo Steel has raised scrap purchase prices by JPY 500/t. The company increased bids by $4/t for all its five facilities. Post-revision, the company's bid price for H2 scrap stands at JPY 65,000/t ($530/t) delivered to Tahara and Utsunomiya, effective 5 April, 2022. Higher export prices amidst currency depreciation continue to push up domestic offers.

Outlook: Japan's monthly Kanto Tetsugen ferrous scrap export tender has been scheduled for 12 April, 2022, sources informed SteelMint. Last month, a total of 10,000 t of scrap was awarded and the average price for H2 scrap stood at JPY 63,510/t ($548/t) FAS, higher by JPY 7,665 ($66/t) m-o-m.