Japan: Scrap export trades slow down in absence of firm bids

Japanese scrap export trades remained slow for yet another week. Despite the drop in offers, buyers are still out of the Japanese market due to disparity in bids and offers. Offers have hit a five-month low. Meanwhile, there were no bids from major buyers like South Korea, Vietnam and Bangladesh this week.

Following the global downtrend, Japan's Tokyo Steel has also lowered its domestic scrap purchase prices sharply.

SteelMint's assessment for Japanese H2 scrap export prices stands at JPY 50,500/t ($374/t) FOB, down JPY 1,500/t ($11/t) w-o-w.

Buyers' market overview

• South Korean mills absent from Japanese market: South Korea's major mills didn't place bids for Japanese scrap this week. However, mills continued to lower domestic material purchase prices. The country's major steelmakers POSCO, Hyundai Steel, SeAH Besteel and Dongkuk Steel have cut domestic scrap purchase prices, as per Steel Daily. Hyundai Steel trimmed prices for the Pohang, Incheon and Dangjin steelworks, while POSCO lowered prices for Gwangyang and Dongkuk for the Pohang and Incheon plants. The companies slashed purchase prices of all grades of scrap by KRW 10,000/t ($8/t).
  
  
• Offers for Vietnam drop further by $20: Vietnam-based scrap buyers were mostly away from the Japanese market. Mills preferred to book bulk cargoes from the Baltic region a week ago fue to competitive costs. Imported Japanese bulk H2 scrap was being offered at $405/t CFR levels, down $20/t as against Monday, owing to sluggish demand from domestic and overseas end-users for finished steel and semi-finished products.
  
  
• Bangladeshi buyers book bulk cargo from USA: Bangladeshi buyers booked USA-origin bulk scrap cargo recently as imported bulk scrap prices fell further. A mill booked one US-origin bulk cargo a couple of days back which comprised 32,000 t of mixed material, in which HMS was booked at $390/t CFR. The cargo was booked for August shipments. Meanwhile, Bangladesh received the first 32,000t bulk scrap vessel from Japan. Japanese recycler Matec has exported about 32,000 tonne (t) of iron scrap, considered the largest ever bulk scrap consignment, to Bangladesh. However, fresh bookings for Japanese bulk cargo are yet to resume.
  
  

Japan's domestic market overview

• Tokyo Steel lowers domestic scrap purchase price: Tokyo Steel, Japan's largest EAF steelmaker, has lowered scrap purchase prices for the third time this week. The company has slashed bids by JPY 1,000/t ($4/t) for four of its steelworks, effective 25 June. Post-revision, the bid prices for H2 scrap are at JPY 54,000/t ($401/t) delivered to the Tahara plant, while prices remain unchanged at JPY 53,000/t for the Utsunomiya works.
  
  

Outlook: Japanese suppliers are likely to quote fresh offers at a discounted price to Vietnam and South Korea owing to the subdued domestic market.