Japan: Ferrous scrap exports drop 6% m-o-m in Nov'21 on subdued winter demand

Japan, one of the leading ferrous scrap exporting countries, recorded 0.46 million tonnes (mn t) of overseas sales of the material in Nov'21 as against 0.49 mn t in Oct'21, showing a 6% m-o-m drop, as per customs data maintained with SteelMint.

The m-o-m fall in exports in Nov'21 was largely due to decline in demand from the construction sectors of key importing countries as activities typically slow down in the winter months. Also, bid-offer disparities and higher domestic prices held back Japanese scrap suppliers from concluding export deals at lower prices.

The country exported 6.55 mn t of scrap in Jan-Nov'21, down by 22% y-o-y as against 8.38 mn t in the same period last year.

Market highlights

• Exports to South Korea fall: Japan exported 227,072 t of ferrous scrap to South Korea in Nov'21 as against 231,756 t in Oct'21, marking a marginal decrease of 2% m-o-m. Imports by the Korean mills dipped on decreasing demand for high-grade Japanese scrap which commanded high prices.
  
  
• Exports to Bangladesh nil: Bangladesh's ferrous scrap import volumes from Japan were nil in Nov'21, after seeing a sharp increase to 23,050 t in Oct'21 as against 7,522 t in Sept'21. High freight charges and elevated offers from Japan due to scrap shortage compelled buyers to go for US/EU and other-origin material.
  
  
• Exports to Vietnam rise: Ferrous scrap exports to Vietnam rose m-o-m in Nov'21. The country remained the second-largest importer of ferrous scrap from Japan with 0.17 mn t, showing a jump of 31% m-o-m as against 0.13 mn t in Oct'21. Imports revived on growing buying interest for seaborne scrap owing to an increase in demand for raw materials from the construction industry which propelled buyers to restock the material.
  
  
• Disparity in domestic, exports prices: SteelMint's price assessment for Japanese H2 scrap exports rose to JPY 52,640/t FOB ($459/t) in Oct'21 after hitting JPY 46,250/t FOB ($403/t) in Sept'21. On the other hand, SteelMint's price assessment for the Utsunomiya plant's H2 scrap rose to JPY 53,610/t ($467/t) in Oct'21 after hitting JPY 47,100/t ($410/t) in Sept'21.
  
  

Outlook
Japanese scrap demand is likely to remain supported from Bangladesh on restocking needs. However, volumes to Vietnam are likely to decline on rising Covid cases.