Japan: Ferrous scrap prices fall as mills' lower bids sharply

• Japanese scrap export offers fall for the second successive week
  
  
• Hyundai Steel cuts bid for Japanese scrap by $15
  
  
• Tokyo Steel cuts scrap purchase price twice this week
  
  

Japanese scrap export offers have come down for the second consecutive week. Japan's Kanto Tetsugen scrap export tender set a benchmark for scrap export offer, which was concluded this week at an average price of JPY 42,976/t ($395) FAS basis for around 15,400 t of Japanese H2 scrap. Bids in the tender fetched higher than the previous month but were lower than prevailing market prices.

SteelMint's assessment for Japanese H2 scrap export stands at JPY 44,000/t ($417) FoB, *down by JPY 1,000/t ($9) w-o-w. Fresh offers for Japanese H2 are being cited at JPY 44,000-44,500/t FoB levels.

Hyundai Steel lowers bids for Japanese scrap by $15 - South Korean mill - Hyundai Steel has reduced its bids for Japanese scrap by JPY 1,500/t ($14) for all grades, sources have confirmed to SteelMint. The bid for H2 is now set at JPY 42,000/t ($392) FoB level, down against its last bid on 04th Mar'21. Till now, no deal has been reported at the presented bid price.

Japanese scrap offers to Vietnam & Bangladesh fall- H2 scrap offers to Vietnam and Bangladesh have come down after Kanto tender's outcome. Market participants believe that prices are likely to remain supportive as scrap availability has increased. Currently, bulk H2 offers to Vietnam stand at $460/t CFR Vietnam, down by $12/t against the beginning of the week and the same for Bangladesh now stands at $470/t CFR Chittagong levels (down by $2). Though deals were not reported at these levels. The upcoming three months are considered as being the peak season for steel consumption and this is likely to increase the scrap demand.

Japanese domestic scrap prices fall as Tokyo Steel cuts bids- Japan's leading EAF mill - Tokyo Steel has lowered its scrap purchase price twice this week for all five of its plants by a total of JPY 1,000/t ($9). The company would now pay JPY 42,000/t ($385) and JPY 41,500 ($380) for H2 scrap delivered at Tahara and Utsunomiya works respectively. This the second price cut made by Tokyo Steel after continuous hike was observed in last one month. Further price cuts are likely to happen majorly in Kanto region.

Tokyo Steel's scrap purchase prices

Prices in JPY
Source: Tokyo Steel report

Outlook: Market insiders believe that this must be a short-term price correction as there is still a demand for steel which may boost scrap prices in the near term. China's scrap imports from Japan are likely to increase in the coming days as prices are favourable at the moment.

*Correction= Prices have moved down on a weekly basis which was mistakenly written as up.