Japanese scrap export offers rise further, limited trades reported

Japanese scrap export prices to South Korea have increased gradually w-o-w. However, South Korean buyers have already refilled their stock when the prices were at favourable levels towards the beginning of the month. Currently, Japanese H2 is being offered at JPY 27,000 -28,000/t FoB Japan level. SteelMint's assessment for Japanese scrap export stands at JPY 27,500/t FoB Japan, up by JPY 500/t w-o-w.

In a recent deal concluded by a South Korean steelmaker has booked higher grade scrap around 20,000 t of Japanese shindachi and shredded at JPY 33,000/t and JPY 32,500/t CFR basis respectively, as per SteelDaily.

South Korea's major steelmaker - Hyundai Steel remained silent since last week and did not make any bid for Japanese scrap. The company has put its last bids price at JPY 26,000/t for H2 grade scrap on 15th Oct. However, deals were not concluded as bids were comparatively low, which is not acceptable by the Japanese suppliers.

Hyundai Steel's crude steel output drops by 3.4% in Q3 CY'20: Hyundai Steel reported Q3 crude steel output at 4.53 mn t, down 3.4% q-o-q compared to 4.69 mn t in the previous quarter CY'20. On a y-o-y basis, production fell by 12% against 5.15 mn t in Q3 CY'19. The company's steel production through blast furnace has increased whereas production through EAF has decreased due to mini-mill shutdown and demand contraction by bad weather.

Construction activities in South Korea have reached last year's levels on the back of continuous investments by govt. to expand infrastructure & public housing, Hyundai Steel mentioned in its Q3 report. Investment in construction sector in 2020 is expected to be around KRW 259 trillion while auto sector is still recovering, according to the data by Korean Institute of Economics and Trade.

Limited bulk offers heard for Bangladesh - There are hardly any firm offers for bulk cargoes from Japan due to tight availability and stronger domestic buying by Japanese mills, traders highlighted. Indicative price for Japanese H2 in bulk stands at $320/t CFR Chittagong level, increasing by $8/t as compared to last week. However, bids are comparatively lower by $5 than current offers.

Japan's domestic scrap market overview- Japan's prominent steel manufacturer -Tokyo Steel did not make any price revision this week, as the company has revised its domestic scrap purchase price twice last week for two of its plants- Okayama and Takamatsu steel center, increasing by JPY 500/t on 21st Oct and JPY 1,000/t on 23rd Oct'20. Currently, the company is paying JPY 27,000/t ($258) for Okayama plant and JPY 26,000/t for Takamatsu steel plant.