Japan: Overseas buyers increase enquiries before Kanto scrap tender

The Japanese scrap export market witnessed a flutter of activity this week. Overseas buyers increased enquiries for Japanese material before the Kanto tender outcome and some deals were concluded at slightly higher prices.

On the other hand, buyers and steel mills are actively waiting for Japan's Kanto scrap export tender for clearer market direction.

Meanwhile, Japan's Tokyo Steel continued to lower its domestic scrap purchase prices owing to slow market movement. SteelMint's assessment for Japanese H2 scrap export prices stands at JPY 47,500/t ($328/t) FOB, unchanged w-o-w.

Japan, a major ferrous scrap exporter worldwide, witnessed a 16% rise in scrap exports at 477,186 t in August as against 411,651 t in July, as per data with SteelMint. Supply increased to countries like Vietnam, China, Philippines, Indonesia, and South Korea, which directly indicates the reason behind the increment in export volumes by Japan.

However, y-o-y exports dipped by 8% from 516,249 t in August 2021.

Buyers' market less active

• South Korean mills active in Japanese market: Hyundai Steel cut its bids for Japanese scrap by JPY 500/t ($3/t) for H2 and HS-grade against the last bid on 22 September, 2022. Bid for H2 scrap stands at JPY 48,000/t ($332/t), while for HS the bid is at JPY 53,500/t ($370/t) FOB. Meanwhile, prominent scrap buyer, Daehan Steel has booked a decent quantity of H2 material at JPY 49,000/t FOB.
  
  

Furthermore, major mills like Daehan Steel, YK and Korea Steel also lowered the bid for domestic scrap prices by KRW 20,000/t ($14/t), effective from 8 October.

• South Korean mills book Russian cargo: Major South Korean steel mills have resumed contracts for Russian scrap after a month's gap, as per Steel Daily. Dongkuk Steel has booked a bulk cargo, containing 10,000 t A3 scrap at $400/t CFR, which is expected to arrive in November 2022. Interestingly, the Russian cargo has been booked after a month, whereas prices fell by $25/t against the last deal recorded on 30 August.
  
  
• Japanese scrap offers to Vietnam soften: Imported scrap offers to Vietnam softened for yet another week. Indicative offers for bulk H2 stand at $380/mt CFR. However, demand from mills for imported scrap bookings remained soft on limited end-user demand.
  
  
• Bangladesh mills prefer US, EU bulk cargoes over Japan: A major mill booked 38,000 t of bulk European cargo recently. The cargo comprised 30,000 t of HMS booked at $418/t CFR, and 4,000 t each of bonus and shredded booked at $428/t CFR Chittagong, respectively. In another deal, around 32,000 t of US-origin cargo was heard booked last weekend at slightly lower prices. The cargo comprised HMS at $410/t, shredded at $415/t and bonus at $420/t CFR Chittagong. However, deals remained unconfirmed till the time of publishing this report.
  
  

Bangladeshi mills postponed fresh bookings from Japan. Buyers and steelmakers are waiting for the Kanto scrap export tender outcome next week. However, indications for imported scrap prices are at $420-430/t CFR Chittagong. Meanwhile, a couple of bulk bookings were heard from the US and European suppliers.

Japan's Tokyo Steel trims scrap buy prices: Japan's major EAF steelmaker, Tokyo Steel, cut its scrap buy prices. The company lowered bids for H2 scrap by JPY 500/t ($3/t) for all its plants, effective 6 October. Post-revision, prices of H2 scrap are at JPY 48,500/t ($336/t) delivered to the Tahara plant and JPY 49,500/t ($343/t) for the Utsunomiya plant.

Outlook: Japan's monthly Kanto Tetsugen ferrous scrap export tender has been scheduled for 12 October, sources informed SteelMint. Last month, a total of 15,000 t of H2 scrap was awarded at an average price of JPY 51,040/t ($352/t) FAS. Sources revealed that the entire quantity was booked by a major steel mill based in Bangladesh. Overseas buyers are likely to return to the market after the tender concludes.