Japan: Ferrous scrap export offers fall to 4-month low on limited demand

Japan's scrap export market witnessed a slight slowdown in prices w-o-w due to limited bids from overseas buyers like South Korea and Vietnam. Moreover, the approaching Golden Week holidays are also just round the corner, adding to the market slowdown.

Demand for commercial-grade steel products remained sluggish across the domestic market, especially from civil engineering and construction user-industries. The pace of construction of small and medium-sized private properties, excluding large-scale properties and logistics warehouse projects, has been slow, with weather affecting demand for automobiles and machine tools.

The limited demand from domestic and overseas markets kept suppliers under pressure, while raw material inventories also remained high.

SteelMint's assessment for Japanese H2 scrap prices stands at JPY 47,000- 48,000/t FOB, down by JPY 1,500-2,000/t w-o-w on limited trades. Prices have fallen to a four-month low.

Tokyo Steel has trimmed ferrous scrap procurement prices by JPY 1,000/t ($7/t) for the Utsunomiya plant and by JPY 1,500/t ($11/t) for the other two plants amid sluggish downstream demand. Prices are effective from 26 April. Post-revision, H2 scrap prices stand at JPY 49,000/t ($366/t), delivered to Utsunomiya, JPY 50,000/t ($373/t) to Tahara, and JPY 49,500/t ($369/t) to Okayama.

Buyers lower bids

• South Korea: South Korea's Hyundai Steel has slashed Japanese scrap bid prices by up to JPY 2,000/t ($15/t). Bids for H2 scrap stand at JPY 47,800/t ($357/t) FOB, and those for HS grade at JPY 51,300/t ($384/t) FOB. The company continues to trim prices in a fourth successive decline since March 2023, amid lower domestic prices.
  
  

Additionally, the other mills have also lowered their bids for domestic materials, due to high inventory.

• Vietnam: Another prominent Japanese scrap buyer remained out of the market due to low finished steel demand in the domestic market. Offers to Vietnam were heard at $390-$400/t CFR Vietnam for H2 scrap, although bid levels remain lower by $10-15/t CFR Vietnam.
  
  

Further, Vietnamese mills were not in the mood to accept deep sea material at high prices due to the availability of domestic scrap at low prices.

Outlook

In the near term, the Golden Week holiday period is coming up, when electric furnaces will remain suspended for a specific time. As a result, supply may get impacted in the area.