Japan: Ferrous scrap prices rise on improved bids

Japanese ferrous scrap suppliers have raised offers citing improved demand from key countries Vietnam and South Korea. Tracking the hike in export offers, bids for domestic scrap purchases have also witnessed a momentum. SteelMint's assessment for Japanese scrap export offers stands at JPY 49,000/t FOB, moving up by JPY 1,500/t w-o-w.

Stronger buying interest from Vietnam: Vietnam's bulk scrap buyers have exhibited improved buying post-lifting of lockdown restrictions. Despite the continuous hike in imported scrap prices from Japan, buyers and steel mills actively started restocking inventory. Increasing demand from domestic and overseas markets have kept buyers aggressive at the moment. Fresh offers for bulk Japanese H2 are being quoted at $500-505/t CFR Vietnam levels, SteelMint learned.

South Korea's POSCO raises bids: South Korean steel major Pohang Iron & Steel Company (POSCO) has signed a contract for Japanese scrap, as per the latest Steel Daily report. The company's bid for shredded scrap is now at JPY 61,000/t ($549/t) and for HS grade material is at JPY 64,000/t ($576/t) CFR. The price hike in shredded is by JPY 500/t against the bid placed on 30 Sept'21.

South Korean steelmaker Dongkuk Steel has signed a contract for 25,000 t of Russian A3 scrap cargo for Nov'21 shipment, as per Steel Daily reports. The price of scrap has been finalised at $483/t on CFR basis, increasing slightly by $3/t against the previous deal concluded on 25 August. Notably, South Korean steel mills did not bid for Japanese cargo since the last two weeks after the three days of Chuseok holidays because of the higher prices.

Chinese market quiet: Currently, the Chinese market is on holiday and is likely to remain quiet for the next seven days as citizens enjoy the Golden Week from 1-7 Oct'21. On the other hand, Chinese scrap buyers seem less interested in booking Japanese cargo due to discrepancy in bids and offers.

Japan has registered a 9% m-o-m drop in ferrous scrap export volumes in Aug'21. The country exported 0.52 mn t of scrap in August as against 0.57 mn t in July, according to data compiled by SteelMint. South Korea was the largest importer at 0.37 mn t in August followed by Vietnam and Taiwan at 0.09 mn t and 0.03 mn t, respectively. 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.

Tokyo Steel raises scrap buying prices by up to $18/t: Tokyo Steel announced a hike in scrap purchase prices today. The steelmaker has raised bids by JPY 1,000/t ($9) for the Okayama, Takamatsu and Kyushu works, while prices were raised by JPY 2,000/t ($18/t) for the Tahara and Utsunomiya works. Post-revision, the company's bid price for H2 scrap will be JPY 52,000/t ($468/t) for Tahara and JPY 49,000/t ($447/t) for Utsunomiya.

Source: Tokyo Steel
Prices in JPY

Outlook
Japanese scrap prices are likely to remain supported on renewed buying interest from key traditional markets.