Japanese H2 scrap export offers down w-o-w amid unfavourable exchange rate

• Limited vessel availability keeps freight rates high
  
  
• Vietnamese mills cautious amid bid-offer disparity
  
  

This week, the Japanese H2 scrap export offers fell as buyers, especially in Vietnam, pulled back due to weak domestic demand, slow government project disbursements, and cash flow issues. While limited vessel availability kept freight rates elevated, it only added to buyers' hesitation rather than supporting prices. Additionally, the unfavorable USD-JPY exchange rate reduced the competitiveness of Japanese scrap, further weakening demand.

BigMint's latest assessment of Japanese H2 scrap export was placed at JPY 43,000/t ($287/t) FOB Tokyo Bay, down by JPY 2,000/t ($13/t) from JPY 45,000/t ($300/t) in the previous week.

According to the latest Japan Iron and Steel Association report, the average H2 scrap price across Japan's three major regions stood at JPY 38,200/t ($255/t) in the fourth week of November, marking a slight JPY 100/t ($1/t) increase from the previous week. Regional prices remained steady in Kanto at JPY 41,500/t ($277/t), rose by JPY 400/t ($3/t) to JPY 37,000/t ($247/t) in Kansai, and stayed flat at JPY 36,200/t ($241/t) in Chubu.

Additionally, the domestic FAS collection prices for H2 scrap held steady at JPY 41,500-43,000/t ($277-287/t). A trader source said, "Prices are relatively unchanged for now, but with the current exchange rate, a decline could be imminent."

Other market updates

Vietnam: Imported ferrous scrap offers edged up slightly despite sluggish demand as buyers maintained a cautious stance amid a persistent bid-offer gap and a slowdown in domestic demand. The weak domestic market sentiment stemmed from low government investment disbursements and delays in project approvals, further dampening buying activity.

Vietnam's domestic scrap prices fell to VND 8,700-9,300/kg ($343-$367/t) in the north and VND 8,300/kg ($327/t) in the south as of mid-week amid sluggish demand and cautious stocking by mills. Despite the end of the rainy season, demand remains stable but low. Market participants expect a potential rebound with improved construction activity in the dry season.

Taiwan: Feng Hsin Steel, Taiwan's largest rebar producer, has kept its rebar list price at TWD 18,400/t ($567/t) exw and local scrap buying price at TWD 9,000/t for transactions during the current week, after recent price cuts.

Global scrap prices continue to decline, with Japan-origin H2 at $320/t CFR Taiwan. Despite lower scrap prices, Taiwan's mini-mills are maintaining stable rebar prices, expecting steady downstream demand ahead of the Chinese New Year.

South Korea: Subdued steel demand and seasonal winter slowdowns have pressured the market, with rebar mills operating at just 35%-40%.

Mills maintained HS bids at JPY 50,000/t ($329/t), Shredded at JPY 49,000/t ($323/t), and raised Shindachi Bara bids to JPY 50,000/t CFR Korea.

Domestic scrap grades like Light A scrap prices in South Korea fell to KRW 345,000/t ($247/t) by this mid-week from KRW 360,000/t last week, while Heavy A steadied at KRW 375,000-390,000/t ($269-$279/t).