Japan: Ferrous scrap exports decline by 19% m-o-m in Jul '20

Japan- the world's third-largest ferrous scrap exporter has registered a significant fall in scrap exports by 19% m-o-m to 0.7 mn t in Jul '20 as against 0.86 mn t in Jun '20, as per customs data maintained with SteelMint.

The Japanese market suffered from lower liquidity for a few months, with a slowdown in bookings from key scrap buyers in South Korea and Taiwan. COVID-19 regulations imposed in April-June hindered some manufacturing and construction activities.

Vietnam remained the largest scrap importer at 0.30 mn t, up 17% m-o-m in Jul '20. Vietnam's import demand for raw material continued to strengthen amid its limited domestic scrap supply and its growing capacities over the years.

Export volumes to South Korea observed a decline of 36% m-o-m, at 0.16 mn t in Jul '20. Similarly, on a yearly basis, exports to South Korea sharply fell by 41% y-o-y from 0.27 mn t during the same month in the previous year.

South Korean mills started decreasing scrap imports which weakened the domestic market and coronavirus made the situation worse. The fall in Japanese scrap supply was expected as mills scaled back buying and Korean mills were not active in the seaborne scrap market during lockdown.

Increased preference to Russian cargoes over high Japanese scrap export offers lowered bookings for Japanese scrap by Korean mills. Japanese scrap export offers increased from JPY 23,600/t FoB levels in May '20 to JPY 25,600/t levels in Jun '20, thus Korean buyers shifted towards other scrap sources.

Quantity in t
Source: SteelMint stats & customs data