Japan: H2 scrap export offers drop by $12/t w-o-w on subdued buying interest

Japan's H2 scrap export offers dropped during the week owing to diminished interest from major importing countries. According to BigMint's weekly assessment, Japanese H2 scrap export offers now stand at JPY 50,400/t ($342/t) FOB Tokyo Bay, indicating a decrease of JPY 1,700/t ($12/t) compared to last week's JPY 52,100/t ($354/t) FOB.

Meanwhile, Japan's steel scrap price index maintained relative stability over the same period. The Japan Iron and Steel Association reported that the average price of H2 furnaces across three regions in the first week of March remained consistent at JPY 49,100/t ($334/t). Specifically, prices in Kansai declined by JPY 100/t ($1/t) to JPY 48,900/t ($332/t), while Kanto recorded JPY 50,500/t ($343/t) and Chubu remained unchanged at JPY 47,800/t ($325/t), aligning with the rates from the preceding week.

Tokyo Steel, a prominent Japanese mill, has decided to reduce its prices for domestic ferrous scrap by JPY 500/t ($3/t), effective 8 March. Consequently, the new price for H2 scrap at the Tahara, Okayama, and Utsunomiya plants is approximately JPY 52,500/t ($355/t). This adjustment holds significant importance as it signifies the first price decrease in March preceding the upcoming Kanto tender.

Other market updates

Vietnam: Vietnamese buyers refrained from booking scraps from the seaborne market due to disparities in bids and offers. Japanese H2 scrap export offers stood at $385/t CFR Vietnam, while buyers' bids were around $380/t CFR levels.

According to market sources, demand was anticipated to improve after the Lunar New Year holiday. However, the continued decline in global markets has left buyers uncertain about the price direction. As a result, the majority of buyers have adopted a wait-and-watch stance.

Taiwan: At the beginning of the week, Taiwanese mills displayed limited interest and managed to secure a deal. However, as the week progressed and with the ongoing decline in global markets, coupled with subdued demand from the domestic steel market, interest waned. Offers for H1/H2 50:50 grade from Japan were assessed at $370-375/t CFR Taiwan, while a deal was concluded at $368/t. However, the exact quantity could not be confirmed at the time of reporting.

Feng Hsin Iron and Steel, a Taiwanese steelmaker, has decided to lower its domestic scrap and rebar prices in response to weak demand and challenging market conditions. The company reduced its bid price for domestic scrap by TWD 300/t to TWD 11,300/t and decreased downstream rebar prices by TWD 300/t to TWD 18,800/t. This adjustment was prompted by the significant decline in prices in the seaborne scrap market and the competitiveness of Russian billet imports. Despite these price cuts, steelmakers remain concerned about margins due to sluggish steel sales.

South Korea: South Korea continued to stay on the sidelines for the entire week, marking a full month since a South Korean mill had placed bids in the seaborne market.

Outlook

Japanese H2 scrap export offers are expected to soften further due to a sharp fall in other Asian markets, combined with reduced buying interest from major importers such as Vietnam and South Korea. Moreover; market participants are waiting for upcoming Kanto tender to get a clear price direction.