Japan: H2 scrap export offers decrease by $5/t, marking third weekly decline

Japanese H2 scrap export offers witnessed a third consecutive weekly decline due to a lack of bids from buyers, even at reduced prices. Additionally, the recent Kanto H2 scrap export tender was awarded at a price lower by JPY 1,226/tonne (t), which further impacted market sentiments. This marked the first decline in the Kanto tender in three months.

According to BigMint's weekly assessment, Japanese H2 scrap export offers stood at JPY 49,500/t ($315/t) FOB Tokyo Bay, down by JPY 800/t ($5/t) compared to JPY 50,300/t ($320/t) FOB a week earlier.

In the Japan's Kanto export tender yesterday, approximately 25,000 t of H2 scrap were sold at JPY 51,364/t ($327/t) FAS, reflecting a decrease of JPY 1,226/t ($8/t) from the previous month. The dollar conversion of the FAS price fell by $6-7/t m-o-m, primarily due to the JPY's depreciation against the US dollar. Notably, the JPY is currently at a ten-year low, valued at JPY 157/dollar. (It is equivalent to JPY 52,500/t on a FOB basis ($334/t)).

Two successful bids were made at the tender, one at JPY 51,510/t FAS for 10,000 t and another at JPY 51,267/t for 15,000 t. The FOB price is estimated at JPY 52,500/t ($334/t), a Bangladeshi steel mill booked one shipment, while a Vietnamese mill secured the other.

Other market updates

Vietnam: Japanese H2 scrap export offers to Vietnam saw a slight decrease of $5/t, dropping to $365/t CFR from $370/t CFR in the previous week. However, buyers showed no interest and did not make any counteroffers. At the start of the week, a deal was reportedly concluded at approximately $365/t CFR, but following the Kanto tender conclusion, buyers' asking prices fell, and tradable values were heard at $360/t CFR.

South Korea: South Korean steel mills have recently returned to the seaborne market after a long pause due to stable prices, despite the potential for a decline caused by weak downstream demand. A major steel giant, POSCO, has shown interest in Japanese shredded scrap, shindachi, and HS scrap.

"There is a limited supply of shredded scrap in South Korea; thus, there is seaborne demand. Suppliers located along the Sea of Japan were also seeing weak demand for their shredded supply and were thus willing to sell, too," said a market insider.

This week, the combined ferrous scrap inventory of eight major South Korean steel manufacturers was approximately at 766,000 t, remaining largely stable with a slight decrease of 1,000 t compared to the previous week's 767,000 t.

Taiwan: Offers for H1/H2 50:50 scrap from Japan to Taiwan were heard at $353/t CFR, but there was no buying interest at this level.

Taiwan's largest rebar producer, based in Taichung, has decided to hold its rebar list prices and local scrap procurement prices from 11-14 June to monitor market changes, as per a company official. The mini-mill continues to offer its 13mm dia rebar at TWD 19,100/t ($590/t) EXW, and its buying price for local HMS (80:20) scrap remains at TWD 10,500/t.

Production at Taiwanese steel mills will remain low this summer due to an annual power supply rationalisation scheme from June to September, requiring heavy industrial users to curb electricity consumption. Additionally, mills typically conduct maintenance during this period, further reducing output.