Japan: Ferrous scrap exports jump 38% m-o-m in Oct'23

In October, Japan experienced a notable 38% surge in ferrous scrap exports, reaching 0.66 million tonnes (mnt), compared to the previous month's 0.48 mnt. On a y-o-y basis, exports increased by 5% compared to the 0.63 mnt reported in October 2022.

For the cumulative period of January to October in the current calendar year, scrap exports from Japan totaled 5.55 mnt. This reflects a 7% increase compared to the corresponding period last year, which saw 5.17 mnt in exports.

Country-wise exports

South Korea: South Korean mills imported about 0.2 mnt of Japanese scrap in October, registering a rise of 11% as against 0.18 mnt in the preceding month. However, on an annualised basis, imports dropped by 29% against 0.28 mnt in the same month of last year. The surge in imports can largely be attributed to a decrease in scrap generation in Korea. Nevertheless, demand remained subdued throughout the month, primarily due to a significant bid-offer disparity.

Vietnam: Scrap exports to Vietnam jumped from a mere 0.1 mnt in September to 0.18 mnt in October, registering a whopping rise of 80% m-o-m. Similarly, when compared to October 2022 scrap imports into Vietnam jumped 29% compared to 0.14 mnt.

Bangladesh: Scrap imports into Bangladesh stood at 0.09 mnt in October, a significant rise of over 125% as against 0.04 mnt in the previous month. Notably, there were no imports in the same month of last year. Bangladesh demonstrated robust engagement in the Kanto tender as a prominent steel mill submitted the highest bid for Japanese bulk scrap, emphasising its keen interest in Japanese materials. Notably, the mill successfully secured a substantial order of 15,000 tons of H2-grade bulk cargo in October.

Taiwan: Taiwan's scrap imports totaled 0.08 mnt in October, as against 0.07 mnt a month ago. Y-o-y, imports rose by 33% as against 0.06 mnt in October 2022. At the start of the month, Taiwanese mills were actively acquiring scraps from Japan in response to re-stocking demand. However, towards the end of the month, buying interest waned due to ample stocks on hand and discrepancies in bids and offers.

Japan's H2 scrap export offer: Japan's average monthly H2 scrap export offers stood at JPY 49,050/t ($333/t) in October, down by JPY 600/t ($4/t) against JPY 49,650/t ($337/t) in September.

Semi-finished exports: Japan's steel billet exports dropped by 13% to 209,218 t in October in comparison with 239,933 t in September. South Korea was the top importer at 67,090 t, followed by Taiwan at 53,050 t during the month under review. However, in January-October, billet exports remained largely stable y-o-y at 2.33 mnt as against 2.34 mnt in the year-ago period, as per Customs data.

Outlook

In November, Japan's exports are expected to experience a mixed trend. South Korea, a significant importer, is anticipated to shift its focus more towards domestic procurement, given the reduction in scrap purchase prices by 3-4 times by domestic steel mills during the month. Conversely, exports to Vietnam may see growth due to re-stocking activities ahead of the Lunar New Year holidays. Likewise, scrap exports to Taiwan may also increase owing to active interest in the market.