Japan: Ferrous scrap exports hit 7-month low in Aug'21

Japan, one of the leading ferrous scrap exporting countries, recorded 0.52 million tonnes (mn t) of overseas sales of the material in Aug'21 as against 0.57 mn t in Jul'21, down 9% m-o-m, as per customs data maintained with SteelMint. Export volumes have fallen to seven-month lows as against 0.48 mn t in Jan'21.

The m-o-m fall was primarily due to weaker demand and bid-offer disparites from some of Japan's key buyers like Vietnam, Bangladesh and China.

On a y-o-y basis, scrap exports registered a fall of 20% as compared to 0.65 mn t in Aug'20.

Market highlights

• South Korea remains top importer: Japan exported 0.37 mn t of ferrous scrap to South Korea in Aug'21 as against 0.30 in Jul'21, up by 23% m-o-m. Imports from the Korean mills rose owing to increased inquiries for Japanese high grade scrap (shredded and Shindachibara) backed by robust domestic demand and rise in automobile production.
  
  
• Exports to Vietnam fall: Volumes to Vietnam came in second at 0.09 mn t, representing a slump of 44% on the month as against 0.16 mn t in July. The import volumes fell due to Covid-19 lockdown in Vietnam's major cities since July which was extended till September-end, resulting in a fall in the nation's raw material demand following production cuts.
  
  
• Exports to China down on bid-offer gaps: China's ferrous scrap import volumes from Japan fell sharply by 64% to 12,911 tonnes (t) in Aug'21 as against 35,580 t in Jul'21. The plunge was due to poorer demand against the backdrop of stringent crude steel production cuts for the second half of 2021, which led to a sustained and wide bid-offer spread within the Chinese market. Meanwhile, the mills preferred consuming South Korean ferrous scrap.
  
  
• Scrap export prices trend down: SteelMint's price assessment for Japanese H2 scrap exports fell to JPY 47,920/t FOB in Jul'21 after hitting JPY 48,500/t FOB in June.
  
  

Outlook
Demand for Japanese imported scrap is expected to improve gradually in October as demand from Vietnam has slightly improved on active billets buying inquiries from China.