Japanese H2 scrap export offers drop w-o-w as buyers exercise caution

• US election, Chinese stimulus news keep buyers on their toes
  
  
• Market awaits conclusion of Kanto's H2 export tender on 12 Nov
  
  

Japanese H2 scrap export prices declined this week, driven by weak buying interest from major importing countries. Market sentiment was cautious, with buyers waiting for clearer direction in the aftermath of the US election results and China's stimulus announcement. Additionally, buyers are expected to stand by until the upcoming Kanto tender on 12 November, which is expected to shape market sentiment in the near term.

BigMint's latest assessment recorded Japanese H2 scrap at JPY 44,500/t ($292/t) FOB Tokyo Bay, a drop of JPY 1,700/t ($11/t) from JPY 46,200/t ($303/t) FOB on 25 October 2024.

Domestic FAS collection prices for H2 grade remained range-bound w-o-w at JPY 40,500-42,500/t ($266/t-279/t).

Other market updates

Vietnam: Vietnam's imported and domestic scrap markets remained sluggish in early November, with minimal activity and cautious sentiment. The market was largely on hold, awaiting clarity following the US election, and slightly bearish expectations dominated due to declining steel and scrap prices in Turkey and reduced inventory needs at mills.

Imported Japanese H2 scrap offers stood at $328-345/t CFR Vietnam, though buyers' interest hovered at around $340/t. The conclusion of a recent deal at $335/t CFR reflects limited trading activity.

Domestically, northern Vietnam's scrap prices (Type 1/H2-equivalent 3-6 mm) stayed steady at VND 9,000-9,400/kg ($354-370/t), with southern prices at VND 8,500-8,600/kg ($334-338/t). Domestic demand was weak, impacted by low construction sector activity and sluggish government investment. Mills noted oversupply concerns, as scrap consumption and steel product demand remained muted.

Looking forward, bearish sentiment may persist, with China's potential steel price adjustments after its upcoming state council session adding uncertainty to Vietnam's market.

South Korea: The Korean scrap market remained soft this week, as seasonal demand for construction products waned with winter approaching, and real estate sector recovery stayed uncertain. Some South Korean mills placed bids for Japanese HS scrap at JPY 51,000/t ($331/t), shredded at JPY 49,000/t ($318/t), and Shindachi Bara scrap at JPY 50,000/t ($324/t) CFR Korea.

Domestic prices for H2-equivalent Light A scrap slipped to KRW 370,000-375,000/t ($265-268/t), while Heavy A grade remained stable at KRW 395,000-410,000/t ($283-293/t). The market outlook is mixed, with caution prevailing as lower downstream demand is expected in the coming months.

Taiwan: Feng Hsin Steel, Taiwan's largest rebar producer based in Taichung, kept its rebar and local scrap buying prices stable for transactions from 4-8 November, according to a company official. The mini-mill continues to offer 13 mm dia rebar at TWD 18,800/t ($588/t) exw, with local HMS (80:20) scrap procurement prices unchanged at TWD 9,600/t. As of 4 November, prices of US-sourced HMS (80:20) scrap dropped by $5/t to $320/t CFR Taiwan, while Japanese H2 scrap held steady at $325/t CFR.

Despite weak global scrap prices, Taiwan's mini-mills remain cautious, monitoring market changes amid expectations of potential economic stimulus from China. Meanwhile, China's rebar demand softened, impacted by colder northern weather.

Outlook

The outlook for Japanese H2 scrap prices remains cautious, with soft demand from major importers and market hesitation driven by geopolitical factors. Price pressures persist as buyers await clarity on the US election aftermath and potential economic stimulus from China. The upcoming Kanto tender on 12 November will further help gauge market sentiment.