Japan: H2 scrap export offers rise by JPY 700/t ($4/t) following recent Kanto tender

Japan's H2 scrap export offers have increased by JPY 700/tonne (t) ($4/t) over the past week following the conclusion of the recent Kanto tender and active participation from Vietnam.

According to BigMint's latest assessment, Japanese H2 scrap export offers are now at JPY 52,100/t ($327/t) FOB Tokyo Bay, up from JPY 51,400/t ($323/t) FOB the previous week.

In the latest Kanto tender, a major Vietnamese steel company secured around 14,000 t of H2 scraps at JPY 52,168/t ($328/t), representing an increase of approximately JPY 804/t ($5/t) compared to JPY 51,364/t ($323/t) in June's Kanto tender. However, in dollar terms, there was a decrease of about $4/t due to the JPY's depreciation against the US dollar.

On the other hand, Tokyo Steel, the largest EAF steel producer in Japan, has announced a JPY 500/t ($3/t) drop in its scrap procurement prices across all its plants, effective from 13 July. The current price for H2 scrap stands at JPY 51,500/t ($323/t) at its Tahara plant and JPY 52,000/t ($327/t) at its Utsunomiya plant.

Other market updates

Vietnam: Vietnamese steel mills exhibited limited interest during the week due to a slowdown in the domestic flat and longs market. However, demand from Vietnam remained relatively stronger compared to other Japanese scrap-importing nations, with the recent Kanto tender awarded to a Vietnamese steel mill. Market participants noted that steel demand has slightly improved compared to the early months of the year.

H2 scrap offers from Japan were heard at $365-370/t CFR Vietnam, while buyers' asking prices were around $360-362/t CFR.

South Korea: Major South Korean steel mills were not interested in booking scraps from the seaborne market due to subdued steel demand due to the off-season. Notably, POSCO was the only steel major that made bids for Japanese scraps at around JPY 59,500/t for shredded and JPY 60,000/t for HS.

This week, the combined ferrous scrap inventory of eight major South Korean steel mills reached 807,000 t, a 2% or 18,000 t decrease from the previous week's 825,000 t.

Taiwan: Taiwanese mills limited scrap purchases due to a muted rebar market during the summer slowdown. Offers of Japanese bulk H1/H2 (50:50) scraps were offered at $359-360/t CFR Taiwan. US-origin HMS (80:20) was heard at $345-355/t CFR Taiwan, with bids at $340-342/t CFR.

Outlook

Japanese H2 scrap export offers are likely to remain volatile due to currency devaluation. However, mills are attempting to push export prices in US dollar terms. The news of Tokyo Steel's price cut may affect domestic buying and could also lead to a decline in export offers if demand continues to remain sluggish in key markets.