Japan: Scrap export trade slows down, buyers await price direction
Japanese scrap export offers, after witnessing a new all-time high last week, fell this week. Lower bids from South Korean buyers have pulled down the high offers. Suppli...
- Japan scrap export offers fall as Hyundai Steel lowers bids
- Vietnam & Bangladesh books US bulk cargo on high Japanese offers
- Tokyo Steel keeps scrap purchase prices unchanged
Japanese scrap export offers, after witnessing a new all-time high last week, fell this week. Lower bids from South Korean buyers have pulled down the high offers. Suppliers anticipate the offers will fall further, on slow overseas demand. Meanwhile, buyers are waiting for a clearer price direction.
SteelMint's assessment for Japanese H2 scrap export prices stands at JPY 57,000/t ($493/t) FOB levels, down by JPY 1,000/t ($9/t) w-o-w.
Notably, the prices have declined for the first time since the prices continued to head north from the beginning of Jan'22.
Japanese buyers' market scenario
- Hyundai Steel lowers bids for Japanese scrap by JPY 1,500/t ($13/t): Hyundai Steel lowered bids for Japanese scrap today by JPY 1,500/t ($13/t) compared to the last bid on 17 Feb'22, sources informed SteelMint. Bids for H2 scrap are now at JPY 57,000/t ($495/t), while bids for HS scrap are at JPY 62,500/t ($543/t) FOB. Increased number of offers from suppliers and lower demand have resulted in lowering of bids.
Hwan Steel booked 6,000 t of Japanese H2 at JPY 62,000/t (CFR) ($536/t) basis. The contract volume is expected to arrive around mid-March. Hwan Steel intermittently imported iron scrap from Japan, but stopped importing in May 2020 and went for domestic scrap. After a year-and-a-half, it has again resumed imported scrap buying.
- POSCO raises bids for domestic scrap: POSCO raised bids for Japanese ferrous scrap by up to JPY 3,500/t ($30/t) earlier in the week as compared to the last bids placed on 11 Feb'22, as per a SteelDaily report. Bids for HS material were at JPY 68,500/t CFR ($596/t), up JPY 2,500/t ($22/t), while bids for shindachi bara scrap were at JPY 68,500/t ($596/t), up JPY 3,500/t ($30/t).
- Vietnam books US bulk cargo on higher Japanese offers: Southeast Asia's major scrap buyer, Vietnam, booked US-origin 40,000 t of bulk scrap cargo recently. The cargo consisted of HMS 1&2 (80:20) at $570-575/t CFR Vietnam basis. Buyers anticipate that market activities will improve in the near term. But the discrepancies in bids and offers for Japanese scrap kept buyers away from the market. Indication of bulk H2 material surged to $580-585/t CFR levels, registering a sharp hike of $30-35/t against the price received on Monday.
- Bangladesh buyers out of the market, book US cargo: Bangladesh - a prominent bulk scrap buyer - remained out of bulk bookings of Japanese cargo, due to high offers and increased freight rates. In the meantime, a major mill booked US-origin bulk cargo comprising 30,000 t of HMS 1&2 (80:20) and shredded. The cargo has been booked at $565-575/t CFR Chittagong levels.
- Tokyo Steel's scrap purchase prices unchanged: Tokyo Steel's scrap purchase prices remained unchanged since the last revision seen on 15 Feb'22. The company's price for H2 scrap stands at JPY 57,000/t ($494/t) delivered to the Tahara and Utsunomiya plants.
Outlook: Japanese scrap offers are likely to fall further as limited inquiries were received from overseas buyers.