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Japan: H2 scrap export offers drop by $8/t w-o-w amid thin trading

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Melting Scrap

BigMint Bureau

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3 Jan 2025, 13:28 IST

Japan: H2 scrap export offers drop by $8/t w-o-w amid thin trading

Vietnam sees muted buying despite high domestic prices

Taiwanese, South Korean mills focus on inventory control

Japanese H2 scrap export prices fell during the week, due to competitive offers, subdued demand, and thin market activity amid the holiday period. With most Japanese market participants on break from 28 December to 5 January, no new offers emerged, leading to muted transactions.

According to BigMint's latest assessment, Japanese H2 scrap export offers dropped by JPY 1,300/t ($8/t) to JPY 42,100/t ($268/t) FOB Tokyo Bay as against JPY 43,400/t ($276/t) FOB in the previous week.

Other market updates

Vietnam: Vietnam's imported scrap market saw limited activity over the week, with regional demand varying. Japanese H2 scrap offers declined to $315-320/t CFR Vietnam, while indicative bids stood at $310/t CFR. Domestic scrap prices in Northern Vietnam remained relatively high, making imports competitive, while sluggish demand persisted in the south, with mills operating at 50-60% of their capacity. Bulk HMS (80:20 scrap) from the US was stable at $341/t CFR East Asia, but procurement remained muted due to the holiday season, with buyers monitoring market trends from the sidelines.

South Korea: South Korea's imported scrap market remained muted amid sluggish downstream demand and financial pressure on steelmakers due to high rebar inventories. Additionally, Japanese H2 scrap offers were scarce due to the holiday season.

Steelmakers, facing challenges from reduced scrap generation and declining demand, focused on inventory reduction and price adjustments to improve their financial structures. Buyers stayed on the sidelines, awaiting market clarity after the holiday period. Notably, many mills have halted operations from mid-December, which limited buying activity.

Taiwan: Taiwan's imported scrap market remained subdued amid limited trading activity during the New Year period. Offers for US-origin containerised HMS 1&2 (80:20) scrap were scarce, with bids at $284-285/t CFR and offers at $290/t, keeping tradable levels steady at $284-290/t CFR Taiwan.

Bulk Japanese H1:H2 (50:50) offers were around $315/t CFR, but buyers held back, with indications at $305-310/t. Mills focused on inventory management and adopted a wait-and-see approach, in expectation of further price clarity in the coming week.

Taiwan's leading EAF steel mill - Feng Hsin Steel kept rebar and scrap prices firm for 30 December-3 January, awaiting market changes. Its 13mm dia rebar was offered at TWD 18,000/t ($549/t), the lowest since December 2020, and local HMS 1&2 80:20 scrap was at TWD 8,600/t.

Outlook

The near-term outlook for Asian scrap markets remains cautious amid subdued demand and holiday-induced inactivity. Japanese H2 export prices may face further pressure, with limited buying interest in Vietnam, South Korea, and Taiwan. Mills are expected to focus on inventory management and monitor market trends post-holidays, delaying major procurement decisions until clearer direction emerges.