Japan: Ferrous scrap exports drop 8% y-o-y in 9MCY'24

• Japan's scrap exports fall 8% y-o-y due to weak global demand
  
  
• Vietnam shows weak demand for Japanese H2 scrap amid post-holiday caution
  
  

Japan's ferrous scrap export market saw an 8% y-o-y decline in volume, totaling 4.49 million tonnes (mnt) in the first nine months of calendar year 2024 (9MCY'24), down from 4.88 mnt in 9MCY'23.

Exports also decreased m-o-m by 15%, falling from 475,947 tonnes (t) in August 2024 to 403,726 t in September 2024.

This downturn was driven by weak global demand and increased competition from other exporting nations. Domestic scrap prices have also fallen as Tokyo Steel made consecutive cuts due to high inventory levels, prompting a shift toward exporting ferrous scrap for profit amid low domestic demand.

In South Korea, a sluggish construction market has led to reduced ferrous scrap inventory among domestic steelmakers following the Chuseok holiday, primarily due to a lack of deliveries during that period and ongoing factory maintenance. Meanwhile, Bangladesh is facing challenges related to LC issues and political turmoil, which have further impacted its import activities from Japan.

Japanese H2 scrap export offers in September by JPY 5,305/t ($35/t) FOB, reaching JPY 41,575/t ($273/t) FOB from JPY 46,880/t ($308/t) FOB in August.

Country-wise exports break-down

Vietnam: In the first nine months of 2024 (9MCY'24), Vietnam became the leading importer of Japanese ferrous scrap, representing over 35% of Japan's total exports. Imports surged by 61% y-o-y, rising from 1.11 mnt in 2023 to 1.79 mnt in 2024.

However, exports fell by 14% m-o-m, from 171,520 t in August to 147,503 t in September 2024.

Vietnam's demand for Japanese H2 scrap remained subdued in September, influenced by weak global market conditions and cautious buying behavior following National Day holidays. Rising freight rates, stricter taxation investigations and a preference for cheaper alternatives, like US scrap, hindered new purchases.

South Korea: In 9MCY'24, South Korea's imports of ferrous scrap totaled 1.15 mnt, a significant drop of 44% compared to 2.07 mnt in the same period in 2023. Exports also declined m-o-m, falling by 26% from 149,101 t in August to 110,105 t in September.

In South Korea, the demand for Japanese scrap remains weak, hampered by a sluggish construction market and high inventories. Despite falling prices, buyers were hesitant, prioritizing domestic scrap over imports. The recent Chuseok holidays further limited market activity, and although steelmakers have increased stock levels, they continue to face cost pressures, leading to cautious purchasing behavior.

Bangladesh: In the first nine months of 2024, Bangladesh emerged as the third-largest importer of ferrous scrap, with imports totaling 0.39 mnt, representing a 24% y-o-y increase from 0.32 mnt in 2023.

However, m-o-m exports decreased by 10%, falling from 59,478 t in August 2024 to 53,751 t in September 2024.

Taiwan: In 9MCY'24, Taiwan's ferrous scrap imports from Japan reached 0.43 mnt, representing a notable 38% decline compared to 0.70 mnt in the same period in 2023.

However, m-o-m exports increased significantly by 42%, rising from 28,598 t in August 2024 to 40,599 t in September 2024.

Despite lower Japanese offers in September, buyers adopted a wait-and-watch approach due to high inventory levels. Domestic rebar prices decreased amid sluggish construction activity, while expectations of stronger steel consumption in Q4 could provide some relief in demand moving forward.