Japan: Scrap export prices rise even as buyers wait for Kanto tender result

Japanese suppliers have raised their scrap export offers further in response to increased inquiries. Suppliers are mostly on wait and watch mode to know the price direction ahead of the Kanto Tetsugen scrap export tender expected to conclude on 9 February, 2023. Additionally, Hyundai Steel has raised bids for Japanese scrap.

Market participants expect the Kanto Tender to conclude at increased prices compared to JPY 50,932/t recorded in January.

Vietnam's market resumed this week after the Tet holidays, while Bangladesh-based buyers were quiet due to LC opening issues.

SteelMint's assessment for Japanese H2 scrap export prices stands at JPY 52,000-53,000/t ($405-413/t) FOB, up by JPY 1,000/t w-o-w.

Japan's scrap exports dropped 14% to 6.07 mnt in CY'22 compared to 7.02 mnt in CY'21. South Korea remained the largest importer at 3.06 mnt followed by Vietnam and Taiwan at 1.31 mnt and 0.60 mnt, respectively. Japan's scrap exports fell by 12% to 424,545 t in December compared to 480,617 t in the previous month.

Buyer market overview

• Hyundai Steel lifts bids after over 1 month: The South Korean steel major increased its bid prices for Japanese scrap by JPY 3,000/t($23/t) on 2 February after more than a month's gap. After revision, the company's bids for H2 scrap stand at JPY 52,000/t ($405/t) and those for HS are at JPY 56,000/t ($436/t) FOB. The hike in bids was followed by a recent increase in FAS prices into Japan.
  
  

Daehan Steel has announced plans to operate a new yard. The plan is to open a new yard that can load more than 20,000 t of scrap beside the first yard next to the Noksan plant.

• Offers to Vietnam elevated: Vietnam's import market is mostly quiet after the 10-day break during the Tet holidays. No fresh deals were heard so far this week. Offers from Japanese H2 scrap suppliers are slightly higher at $450/t, up $5/t w-o-w. Offers for US-origin HMS 1&2 (80:20) were heard at $455/t CFR Vietnam.
  
  

Outlook: Considering the continuous hike in Japanese scrap export offers, Tokyo Steel is likely to adjust its bid prices for domestic scrap.