Japan: Ferrous scrap exports fall to multi-year lows in Sept'21 on higher domestic demand

Japan, one of the leading ferrous scrap exporting countries, recorded 0.44 million tonnes (mn t) of overseas sales of the material in Sept'21 as against 0.52 mn t in Aug'21, down 15% m-o-m, as per customs data maintained with SteelMint.

Export volumes tumbled to multi-year lows. It is the lowest volumes since data available with SteelMint, from May'16.

The m-o-m fall in exports in Sept'21 from the country was due to continued steady domestic demand from local steelmakers at more competitive prices as compared to the exports market.

Consequently, exports to key destinations like South Korea, Vietnam and Bangladesh remained on the lower side.

On a y-o-y basis, scrap exports registered a fall of 40% as compared to 0.73 mn t in Sept'20.

Market highlights

• South Korea top importer: Japan exported 0.22 mn t of ferrous scrap to South Korea in Sept'21 as against 0.37 in Aug'21, down by 41% m-o-m.
  Imports from the Korean mills dropped due to the sufficient scrap inventory lying with the mills. Thus, they preferred to fulfil their requirements through the domestic scrap.
  
  
• Exports to Vietnam rise: Ferrous scrap exports to Vietnam rebounded in Sept'21. The country remained the second largest importer of ferrous scrap from Japan with 0.11 mn t, representing a jump of 22% on the month as against 0.09 mn t in Aug'21.
  Imports regained slightly on growing Vietnamese buying interest in seaborne scrap as Chinese billets buyers re-entered the market amid production curbs. Additionally, Vietnam turned to the exports market, where demand was heightened by requirements from China.
  
  
• Exports to China down on lower inquiries: China's ferrous scrap import volumes from Japan fell sharply by 32% to 8,727 tonnes (t) in Sept'21 as against 12,911 t in Aug'21.
  The fall was primarily due to wide bid-offer spread for HRS101 within the Chinese market which led the mills to prefer consuming South Korean origin ferrous scrap. One of the major factors for fall in import volumes was absence of trading activities in China due to weak demand against the backdrop of severe crude steel production cuts for the second half of 2021.
  
  Outlook
  Japanese scrap exports are expected to remain on the lower side on the back of increasing domestic demand.