Japan: H2 scrap export offers flat w-o-w on muted demand amid Lunar holidays

Japan's H2 scrap export offers remained unchanged w-o-w owing to muted demand from major importing countries due to the Lunar New Year holidays.

BigMint's weekly assessment of the Japanese H2 scrap export offer was flat w-o-w at JPY 52,000/tonne (t) ($346/t) FOB Tokyo Bay.

As per market sources, FAS collection prices in Kanto Bay stood at around JPY 51,500-52,000/t ($343-346/t).

In the domestic market, the price of H2 furnaces in three regions this week was JPY 48,700/t ($324/t), the same as last week. By region, prices in Kansai fell by JPY 100/t ($0.66/t) to JPY 49,000/t ($326/t), but prices were unchanged from last week at JPY 49,200/t ($327/t) in Kanto and JPY 47,800/t ($318/t) in Chubu, according to the Japan Iron and Steel Association's latest release.

Tokyo Steel, a leading Japanese mill, decided to raise its prices for domestic ferrous scrap by JPY 2,000/t ($13/t), effective 15 February, 2024. As a result, the new price for H2 scrap at the Utsunomiya plant is approximately JPY 53,000/t ($352/t). This adjustment is particularly significant as it marks the first price hike in February, following the recently-held Kanto tender awarding. "The price hike is mainly because maintenance at the Utsunomiya plant was completed last week, and Vietnam and Taiwan will resume operations tomorrow," said a source from the mill.

Other market updates

Vietnam: Steel mills in Vietnam remained quiet throughout the week due to the extended Lunar New Year holiday. Consequently, there was minimal trading activity, with no firm offers or bids observed during this time. The most recent offers for US-origin HMS (80:20) bulk scrap were in the range of $406-410/t, while indicative prices for H2 stood at $398-402/t CFR Vietnam.

Taiwan: Buying interest in Taiwan also remained subdued as the holiday period continued, resulting in limited trading and no finalised deals.

South Korea: Seaborne market activity for South Korean mills remained low as they favoured domestic scrap, which became more economically advantageous following recent price reductions by domestic mills prior to the holidays.

Outlook

Export offers from Japan are expected to experience volatility due to the majority of buyers still being in a holiday mood, which is likely to persist until the week's end. However, there may be an increase in offers due to the depreciation of the Japanese yen against the US dollar.