Japan: Ferrous scrap export offers drop w-o-w on absence of firm bids

Japan's H2 scrap export offers decreased by JPY 800/tonne (t) to JPY 49,500/t FOB due to the absence of firm bids from major importing countries. Moreover, the recent Kanto tender, which was awarded to Bangladesh on 12 October, received limited bids and was closed at JPY 50,236/t FAS for 15,000 t H2 scrap. Notably, it was lower by JPY 1,080/t compared to the last tender held in September. Consequently, market participants are anticipating a further decline in prices.

Other market updates

South Korea: In South Korea, several potential buyers expressed interest in acquiring H2 scrap from Japan; nevertheless, due to a significant gap between bids and offers, no transactions were finalised or reported.

Indications for H2 scrap from Japan were heard at JPY 50,000/t ($) FOB; however, buyers' bids were around JPY 49,000/t ($) FOB levels.

South Korea imported about 238,830 t of ferrous scrap in September 2023, down 14% m-o-m as against 277,603 t in August, according to SteelMint data.

The total scrap inventory of eight South Korean steel manufacturers for this week amounted to 819,000 t, marking a decrease of 19,000 t, equivalent to a 2.3% decline from the preceding week. The major part of this inventory decline was attributed to the reduction in the stock of steelmakers in the central region.

Scrap arrivals in South Korea this week dropped significantly by 46%, declining from 68,845 t last week to 37,000 t. Notably, last week witnessed an increase in new iron scrap arrivals due to the arrival of large mother ships, which has since decreased.

Vietnam: The Vietnamese imported scrap market experienced a notable slowdown throughout the week. This was primarily attributed to sluggish demand and weak sentiments prevailing in the domestic steel market.

In response to the weakness in demand and global market cues, Vietnamese steel major Formosa Ha Tinh has reduced HRC prices by $15/t m-o-m for late-November and early December 2023 shipments. Subsequent to the revision, prices of HRC (SAE1006, skin pass) stood at $580/t CIF Ho Chi Minh City. Meanwhile, non-skin pass coils were assessed at around $575/t CIF.

Taiwan: The demand for imported scrap in Taiwan remained lacklustre this week, with no substantial bids reported from buyers. Nevertheless, the market reported a deal involving H1/H2 50:50 scrap, which was reportedly settled at a range of $367-368/t CFR. However, the exact quantity of the deal could not be verified at the time of publishing this report.

Outlook

Japanese H2 scrap export offers are likely to witness minor corrections amidst subdued demand from South Korea, Taiwan, and Vietnam.