Japan: H2 scrap export offers edge down w-o-w on limited buying interest ahead of Tet holidays

• Higher bids at Kanto tender fail to support prices
  
  
• Sellers trim offers amid persistent bid-offer gaps
  
  

The Japanese ferrous scrap export market remained subdued this week. Japanese H2 export offers declined slightly amid limited bidding interest and weak downstream demand, particularly from Vietnam. Buyers avoided stockpiling ahead of the Tet holidays, opting for need-based purchases instead. Although Japanese suppliers expected price hikes following the Kanto tender (which saw bids rising by $13/t m-o-m), buyers were reluctant to increase bids due to ample mill inventories and slow market conditions. Spot liquidity stayed thin, with a persistent bid-offer gap prompting sellers to consider slight price cuts to address weak demand and bearish market sentiments ahead of the Lunar New Year.

According to BigMint's latest assessment, Japanese H2 scrap export offers slipped by JPY 100/tonne (t) ($0.64/t) w-o-w to JPY 41,600/t ($267/t) FOB Tokyo Bay, compared to JPY 41,700/t ($268/t) FOB the previous week. Notably, offers have dipped slightly in Japanese yen but edged up in US dollar due to the former's recovery against the dollar. To illustrate, last week's offers were equivalent to $263/t compared to $267/t this week.

For the second week of January, the Japan Iron and Steel Association reported the average H2 scrap price across Japan's three regions at JPY 37,900/t ($243/t), unchanged from the prior week. Kansai saw a modest rise of JPY 100/t to JPY 37,000/t ($238/t), while prices in Kanto and Chubu remained steady.

Other market updates

Vietnam: The Vietnamese imported scrap market remained sluggish, with Japanese H2 offers at $312-325/t CFR and tradable values around $310/t CFR, while bids hovered at $295/t CFR. Demand weakened ahead of the Tet holidays, with mills having sufficient inventory and engaging in limited restocking. Offers for bulk HMS (80:20) increased slightly, with US-origin at $355-360/t CFR and Australian-origin at $350-355/t CFR.

While buyers preferred Japanese-origin scrap in comparison with material from the US and Australia, primarily due to a narrowing price gap, they showed hesitation amid persistent bid-offer mismatches. Sellers were reluctant to lower prices significantly, resulting in cautious trading activity and thin spot liquidity.

Taiwan: Taiwan's imported scrap market showed mixed dynamics. Offers for US-origin HMS (80:20) rose to $295/t CFR, up slightly from mid-December, while Japanese H2 scrap held steady at $305/t CFR. Despite firming global scrap prices lending stability to local scrap, rebar prices weakened, driven by softer Chinese billet and rebar values.

Feng Hsin Steel maintained local scrap prices at TWD 8,600/t but reduced rebar prices by TWD 300/t due to thinning downstream demand. Overall, cautious sentiment persisted, with limited transactions amid stable inventory levels and fluctuating regional market conditions.

South Korea: This week, no significant firm offers or bids were reported from South Korean buyers. Meanwhile, the combined ferrous scrap inventory of eight major South Korean steel mills fell nearly 10% w-o-w to 713,000 t. The central region experienced a sharper decline of 11% w-o-w, whereas the southern region saw a more moderate drop of around 7.4%.