Japanese scrap export offers rise significantly on increased demand

Japan's scrap export offers continued to move up owing to scarcity of scrap and increasing demand from domestic and overseas buyers. However, this week no bids were received from South Korean major mills. Yet few lots in small quantities heard to have been booked earlier in the week from South Korea and Taiwan based mills at increased offers. Meanwhile, offers for other prominent buying countries like Vietnam and Taiwan have also increased.

SteelMint's assessment for Japanese H2 scrap export prices stand at JPY 46,000-47,000/t ($337-344/t) FOB, moving up sharply by JPY 4,000 ($29/t) w-o-w.

Market overview

• South Korean mills lift domestic scrap prices after 5 months: South Korean major steel mills have hiked domestic scrap purchase prices twice this week after five months owing to limited inventories and improving demand for rebar, as per SteelDaily. Hyundai Steel (for Incheon, Pohang, and Dangjin works), POSCO's Pohang and Gangyang plants, Dongkuk's Pohang works, Hwan Steel, Daehan, YK and Korea Steel raised prices by KRW 40,000/t ($30/t) for all grades. South Korean mills are raising their domestic scrap procurement prices, while they also offer higher levels for Japanese scrap. Considering the increases in the local market, market will pick up in near term, however, there is a huge gap between imported and domestic prices.
  
  
• Vietnam's imported scrap prices up further: With the continued uptrend in imported scrap prices, Vietnamese buyers likely to raise inquiries to restock inventory ahead of winter season. Current price indications for bulk Japanese H2 material to Vietnam is now set at $400-410/t CFR levels, moving up by $10-15/t from Monday. However, domestic finished steel market remained unsupportive.
  
  
• Bangladesh continues booking non-Japanese deep sea cargo: Bangladesh based major mills continue to book deep sea cargoes. However, offers continued to head north. Around 32,000 t US-origin, mixed scrap cargo was booked, comprising 18,000 t of HMS and 4,000 t of shredded at $455/t and $460/t CFR Chittagong, respectively. In another deal, a total of 34,000 t of Russian bulk cargo was booked, containing 27,000 t of HMS and 7,000 t of shredded at $439/t and $449/t CFR Chittagong respectively, SteelMint learnt from sources.
  
  

Tokyo Steel increases scrap procurement prices: Japan's Tokyo Steel has raised scrap buy prices twice this week. The company increased bids for H2 scrap by JPY 3,000/t ($22/t) for all of its plants. Post second adjustment, bid prices for H2 scrap are at JPY 46,000/t ($336/t) delivered to the Utsunomiya works, while prices for Tahara plant is now set at JPY 45,000/t ($328/t).

Outlook: Japanese scrap prices are likely to move up further on increased demand from domestic and overseas buyers. However, trades are likely to remain slow.