Japan: Scrap market awaits Kanto export tender outcome for price clarity

• Bulk H2 scrap offers for Vietnam drop further by $10/t
  
  
• Tokyo Steel prices fall to two-month lows
  
  
• Kanto scrap export tender scheduled for 9 June
  
  

Japanese scrap export trade activities remained subdued on lower bids from overseas buyers. Prominent buyers like Vietnam and South Korea are waiting for further price corrections. Following the global price hike, Japan's Tokyo Steel has adjusted the domestic scrap purchase prices. Buyers await the Kanto scrap export tender outcome for clear price directions.

SteelMint's assessment for Japanese H2 scrap export prices stands at JPY 53,000/t ($417/t) FOB, unchanged w-o-w.

Market highlights

• Vietnam buyers less interested in Japanese material: Furthermore, another prominent buyer like Vietnam remained less active in booking Japanese material. Buyers are focusing on domestic material for cost competitiveness. Offers for Japanese H2 material are at $470/t CFR , down by $10/t from Monday's levels. Meanwhile, a few buyers have booked cargoes of US origin. The lifting of China's lockdown and economic stability in that country are likely to improve its demand for Vietnam's billet and steel in the near term.
  
  
• South Korean mills slash domestic scrap prices: South Korea's major mills have not bid for Japanese material this week. In contrast, major steel mills Hyundai Steel and POSCO cut their domestic scrap purchase prices, as per Steel Daily. Mills have slashed purchase prices of all grades of scrap by KRW 10,000/t ($8/t).
  
  
• Japan's ferrous scrap exports increase 10% in April: Japan, a prominent ferrous scrap exporter globally, reported a 10% hike in scrap exports at 650,000 t in April 2022 as against 590,000 t in March, as per customs data maintained with SteelMint. However, on a y-o-y basis, exports dropped 24% from 860,000 t in April, 2021. South Korea lifted the demand for high-grade material and buyers booked Japanese material as shipments from Russian counterparts were limited.
  
  
• Tokyo Steel's scrap buy prices fall to 2-month low: Japan's largest EAF steelmaker, Tokyo Steel's scrap purchase prices have fallen to a two-month low in the absence of firm overseas bids. The company cut its bids by JPY 1,000/t ($8/t) for all steelworks, effective from 31 May. Post-revision, the bid prices for H2 scrap are at JPY 57,000/t ($448/t) delivered to Tahara, while prices for Utsunomiya are at JPY 57,500/t ($452/t).
  
  

Additionally, the company has announced scrap buying prices for its new yard, effective from 6 June 2022. Post-revision, bid prices for H2 scrap are at JPY 57,500/t ($443/t) delivered to Nagoya yard.

Outlook

Japan's monthly Kanto Tetsugen ferrous scrap export tender has been scheduled for 9 June, 2022, sources informed SteelMint. Lower bids from participants resulted in the tender remaining inconclusive last month.