Japanese H2 scrap export offers remain unchanged w-o-w amid muted activity ahead of holidays
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- Weak Asian demand limits scrap market activity
- Price rebound seems unlikely before early 2025
Japanese H2 scrap export offers held steady w-o-w as year-end slowdowns and weak demand from Asian steelmakers kept trading activity muted. Vietnamese mills and other buyers avoided significant restocking, citing bearish market sentiment, cautious outlooks, and the approaching Lunar New Year holiday. While Japanese suppliers adjusted offers downward to align with limited bids, the weaker JPY lent some competitiveness to exports. However, the ongoing bid-offer gap and sluggish procurement activity continued to weigh on price movements.
According to BigMint's latest assessment, Japanese H2 scrap export offers remained unchanged w-o-w at JPY 43,400/t ($275/t) FOB Tokyo Bay.
The average price of H2 scrap iron across three regions of Japan in the fourth week of December stood at JPY 37,900/t ($240/t), marking a JPY 300/t ($1.90/t) decline from the previous week. Regionally, prices fell to JPY 41,000/t ($260/t) in Kanto - down by JPY 400/t ($2.53), JPY 35,800/t ($227/t) in Chubu, down by JPY 400/t ($2.53/t)), and JPY 36,900/t ($234/t) in Kansai down by JPY 100/t ($0.63/t).
Other market updates
Vietnam: Vietnam's imported scrap market was lacklustre during the week, with H2 offers stable at $330-335/t CFR and bids below $320/t. Mills maintained cautious procurement strategies amid weak demand and year-end slowdowns, avoiding significant restocking. Domestic scrap prices held steady, ranging from VND 8,550-9,100/t in the north to VND 7,900/t in the south, as market participants believed prices had likely bottomed out.
Mills continued to operate at reduced capacities of 40-50%, reflecting economic instability and concerns over a volatile 2025. The overall sentiment remained bearish, with limited activity expected until after the Lunar New Year.
Taiwan: Taiwan's imported scrap market saw muted activity during the week, with US-origin HMS 80:20 offers sparse at $290-295/t CFR, as suppliers entered holiday mode. A few deals were concluded at $284-$290/mt CFR, reflecting limited demand due to competition from cheaper Russian billets, offered at $445/t CFR, and slow rebar sales.
Japanese H1:H2 (50:50) scrap offers ranged from $300-310/t CFR, but buying interest remained weak.
Domestically, Feng Hsin Iron and Steel held scrap and rebar prices steady at TWD 9,200/t (($280/t) and TWD 17,400/t ($530/t), respectively, following a prior decline.
With steel sales remaining lacklustre and the Chinese New Year approaching, market participants expressed a bearish outlook, expecting subdued procurement activity and potential steel price pressures extending into 2025.
South Korea: South Korea's imported scrap market remained steady during the week, with mill bids for Japanese shredded scrap at JPY 48,000/t ($305/t) CFR and JPY 49,000/t ($311/mt) CFR for both shindachi and HS, reflecting a JPY 1,000/t ($6.33/t) reduction for shredded and HS grades. Domestic scrap prices also held firm, with Light A grade at KRW 335,000/t ($228/t) and Heavy A at KRW 365,000/t ($249/t). The market has been stagnating amid year-end inventory adjustments, subdued demand, and reduced scrap production. While major steelmakers refrained from aggressive buying, some companies achieved year-end sales targets and shifted focus to the upcoming year. Despite faint hopes for a rebound in early 2025, the absence of strong upward drivers kept the market subdued.
Outlook
The near-term outlook for Japan's scrap market remains subdued due to year-end slowdowns, weak demand from mills, and a cautious approach ahead of the Lunar New Year. With limited restocking and a bid-offer gap, market activity is expected to remain muted. While the weaker JPY offers some competitiveness, a price rebound seems unlikely until early 2025, with the overall sentiment remaining bearish.
