Japan: Ferrous scrap export offers drop JPY 1,000/t ($7/t) w-o-w

Japan's H2 scrap export offers decreased for the second consecutive week. Offers dropped JPY 1,000/t ($7/t) compared to last week due to lacklustre downstream demand in major importing destinations. Buyers have chosen to stay on the sidelines, anticipating further drop in scrap offers.

SteelMint's weekly assessment for Japan's H2 scrap stands at JPY 48,500/t ($323/t) FOB Tokyo Bay in comparison with JPY 49,500/t ($330/t) FOB a week ago.

Updates on markets

South Korea: South Korean mills are showing limited interest in imports, primarily due to the availability of more affordable scrap in the domestic market. Additionally, the decline in the global market has led buyers to expect a decrease in import offers from Japan. Moreover, major domestic steel mills have decided to reduce buy prices of scrap by KRW 5,000-10,000/t from 27 October.

Total scrap inventory of eight South Korean steel manufacturers reached 852,000 t this week, marking a notable increase of 33,000 t, equivalent to a 4% rise w-o-w. Building up of inventory after a three-week period can be attributed to the arrival of large ships for POSCO. While inventories of most steel manufacturers were relatively stable or slightly lower, POSCO's inventory saw substantial growth.

Vietnam: Vietnamese scrap buyers have taken a cautious, wait-and-see stance, influenced by the ongoing decline in global markets, especially in Taiwan and Turkiye. As a result, no definitive bids or offers were heard this week. A trader source said, "We didn't see any buying interest or firm bids, which is why we refrained from making any offer this week."

In addition, major Vietnamese steel mill, Formosa Ha Tinh (FHS), has further reduced HRC offers (SAE 1006, skin pass) for December shipment by around $10-20/t m-o-m on CIF Ho Chi Minh basis. Post revision, prices for skin pass HRC are in the range of $560-570/t CIF, depending on the size of orders. The price cut came as Vietnamese steel demand remained subdued, with buyers expecting a price revision.

Taiwan: Taiwanese mills displayed modest interest in imports throughout the week. No deal was finalised due to discrepancies between bid and offer prices. Japanese H1/H2 50:50 scrap was available at $365/t CFR, while buyers were looking to secure deals at $358-360/t CFR.

A steel mill source said, "We have stopped bidding because international scrap prices continue to decrease."

Outlook

Export offers for H2 scrap may continue to face downward pressure due to the limited buying interest driven by disparities in bid and offer prices and more affordable domestic alternatives. Moreover, weak demand in Turkiye has instilled apprehension regarding potential price correction.