Japan: H2 scrap export offers remain stable w-o-w as buyers stay cautious

• Tokyo Steel cuts prices at two plants
  
  
• Vietnamese buyers resist high offers
  
  

Japanese H2 scrap export offers remained stable this week, influenced by thin spot liquidity and a wide bid-offer gap. Meanwhile, domestic FAS collection prices of the H2 grade were range-bound w-o-w at JPY 41,000-42,000/tonne (t). Market participants continued to monitor the situation from the sidelines due to bid-offer disparities.

BigMint's weekly assessment of H2 export offers on a FOB Tokyo Bay basis remained stable at JPY 43,400/t ($277/t).

A Japan-based trader stated, "Fewer seaborne offers are being heard, as many shippers in Japan are currently staying on the sidelines due to the significant price gap between domestic and overseas markets."

Tokyo Steel adjusted scrap procurement prices for the second time this month, with the previous revision having occurred on 11 December 2024. Prices remained steady at all plants, except for Tahara and Utsunomiya, where tags fell JPY 500/t ($3/t), effective 20 December. Post-revision, H2 prices stood as follows:

• Okayama: JPY 41,500/t ($264/t)
  
  
• Tahara, Utsunomiya: JPY 41,000/t ($261/t)
  
  
• Kansai, Kyushu: JPY 40,500/t ($258/t)
  
  
• Nagoya, Takamatsu: JPY 40,000/t ($255/t)
  
  

The price cuts at Tahara and Utsunomiya were made in response to the need to manage costs and reduce production.

Other market updates

Vietnam: The imported scrap market in Vietnam faced weak demand due to a lack of pricing clarity, with both sellers and buyers staying on the sidelines. H2 prices remained range-bound w-o-w, with Vietnamese mills accepting offers at $330-335/t CFR. However, indicative bids were reported at $320-325/t CFR, reflecting a significant bid-offer gap.

According to market participants, scrap prices have been pressured by low steel sales and mill production cuts in addition to weak demand.

A Vietnam-based trader stated, "Demand is still there, but not at high levels. Stockists are not purchasing as much rebar as last year to avoid significant losses when prices are low. As a result, scrap stockists are also not holding much inventory at the moment."

South Korea: South Korea's imported scrap market saw a surge this week, with total volumes at major ports touching 65,980 t. Special steel plate manufacturers were responsible for 79.5% of imports. Key arrivals included 6,275 t at Incheon and 2,000 t at Dangjin for Hyundai Steel, 16,000 t at Gunsan for SeAH Besteel, 2,500 t at Busan for Daehan Steel, and 11,000 t at Pohang and 22,823 t at Gwangyang for POSCO, which recorded the highest inflow this week.

The rise in imports comes amid an increase in the combined ferrous scrap inventory in South Korea, which stood at 758,000 t in the third week of December compared to 752,000 t in the previous one. Inventory rose in the central region, led by Hyundai Steel and Dongkuk Steel, while the southern region remained stable. However, low demand and production halts led some mills to stop accepting scrap.

Taiwan: Feng Hsin Steel, Taiwan's largest rebar producer, cut its rebar list prices and local scrap buying prices by TWD 200/t ($6/t) for 16-20 December. This move follows weak global scrap prices and low demand for finished steel. Prices of US-sourced HMS dropped to $290/t CFR Taiwan, the lowest since November 2020, while Japanese-origin H2 remained steady.

Outlook

The seaborne scrap market is expected to remain slightly bearish in the near term, as sluggish demand continues to weigh on pricing sentiment. Some Vietnamese mills are prioritising competitively priced domestic scrap over imported material. Trading activity remains minimal, with a large bid-offer gap making it difficult to conclude deals. As a result, H2 prices are expected to remain stable with limited changes in the near future, according to market participants.