Japanese H2 scrap export offers rise $3/t w-o-w on firm bids, limited offers

• Vietnamese mill books 15,000 t in Kanto tender
  
  
• Weak steel demand, output keep prices pressured
  
  

Japanese H2 scrap export offers increased w-o-w, especially to Vietnam, driven by stronger bids and limited availability from other exporting nations. Further supporting the rise was the recent Kanto tender, which saw a Vietnamese mill booking approximately 15,000 tonnes (t) of scrap at JPY 45,180/t ($293/t) FAS. While this indicates decent buying interest in the country, overall demand is subdued and cautious sentiments prevail.

BigMint's weekly assessment placed Japanese H2 scrap export offers at JPY 45,000/t ($289/t) FOB Tokyo Bay, up by JPY 500/t ($3/t) compared to JPY 44,500/t ($286/t) FOB last week.

Domestic FAS collection prices for H2 grade remained range-bound at JPY 41,000-42,500/t ($263-273/t).

As per the Japan Iron and Steel Association's latest survey, the average H2 scrap price across three key regions stood at JPY 38,100/t ($245/t), unchanged w-o-w. Regionally, Kanto's prices were at JPY 41,500/t ($267/t), Kansai at JPY 36,600/t ($235/t), and Chubu at JPY 36,200/t ($232/t).

Other market updates

Vietnam: Vietnam's imported scrap market remained subdued, marked by thin liquidity and cautious procurement. Japanese H2 scrap offers to Vietnam stood at $335-340/t CFR, while bids were at around $330/t CFR. Limited offers were noted, as suppliers paused negotiations due to rising freights and vessel shortages. Domestic demand in Vietnam was also weak, with mills unwilling to commit to purchases amid low government investment and delays in project approvals. Despite this typically being an active procurement period, mills are delaying purchases in favour of clearer price directions. Deep-sea scrap alternatives, though available, faced limited interest due to high costs and lower risk appetite among buyers.

South Korea: South Korea's imported scrap market remained stagnant due to reduced production and purchase restrictions by steelmakers. Steel giant, POSCO recently bid JPY 49,000/t ($315/t) for shredded, JPY 50,000/t ($322/t) for Shindachi Bara, and JPY 51,000/t ($328/t) for HS on CFR basis. Low steel production and limited purchasing allocations have created supply challenges, with intense competition among suppliers compressing profit margins. The recent reduction in November production schedules has weakened upward price momentum, and the market expects steelmakers to continue with their cautious approach for the foreseeable future, thereby stretching out the supply-demand imbalance.

Taiwan: Taiwan's imported scrap market softened further amid sluggish demand in the finished steel sector. US-origin containerised HMS (80:20) offers remained steady at $320/t CFR, but bids fell to $314-315/t CFR, below last week's workable levels of $315-318/t CFR. Japanese bulk H1/H2 offers stood at $335/t CFR but were deemed uncompetitive due to high freights. Local mills, including Feng Hsin Steel, reduced rebar tags by TWD 200/t ($6.1/t) and local scrap buying prices by TWD 300/t ($9.2/t), as weak demand and global market pressure weighed on sentiment. The weakness in the Chinese steel market further impacted Taiwanese buying interest.

Outlook

Japan's H2 offers could remain firm on tight supply, but subdued Vietnamese demand and freight challenges might restrict further gains. South Korea's market is expected to stay stagnant due to low production and restricted purchases by steelmakers. In Taiwan, sluggish finished steel sales and the high cost of Japanese scrap will likely keep import activity muted in the near term.