Japanese scrap export offers subdued, trade yet to pick up

The Japanese scrap export trade remained slow for yet another week. The discrepancy in bids and offers led to slowed down market activities. Moreover, the Japanese suppliers are active in the domestic market which is showing strong demand. Notably, good demand for high-grade scrap like shindachi-bara and HS in the overseas market remained the key reason behind the decline in H2 scrap export prices widening the gap with the high-grade category.

Interestingly, this is the third consecutive month since July, that prices have reduced. The price was recorded at JPY 49,500 at the beginning of Jul'21.

SteelMint's price assessment for Japanese H2 scrap exports still stands at JPY 45,000/tonne (t) FoB, unchanged w-o-w.

South Korean mills reduced bid price for higher grade: South Korea-based SeAH Besteel has lowered its purchase price for Japanese ferrous scrap, as per reports. Bids for Shindachi bara scrap are at JPY 62,000/t FoB ($564), while the arriving price is JPY 66,000/t CFR levels ($601/t). The bid price has dropped by JPY 500/t ($5/t) compared to Hyundai Steel's bid price recorded in the preceding week, which was JPY 62,500/t FoB for the same premium grade material.

Another major mill, Daehan Steel, has tried to conclude a deal at around JPY 50,000/t CFR levels for H2 grade. However, the deal remained unconfirmed till the time of publishing this report. The Japanese suppliers are avoiding contracts due to low export prices to South Korea, as per a SteelDaily report.

Bangladesh likely to resume bulk bookings: Bangladesh's bulk scrap import bookings remained limited this week, SteelMint sources confirmed. Offers for US-origin bulk shredded scrap stand at $545/t CFR Chittagong, lower by $5/t w-o-w. Bangladesh-based steel mills need to start restocking as it is expected that the market is likely to pick up in the coming weeks, however bids-offer disparity continues to persist.

Indicative offers for H2 bulk scrap are at around $535-540/t CFR levels, whereas bids are comparatively lower by $15-20/t levels. This is not acceptable to the suppliers.

Vietnamese scrap buyers remain on sidelines: Vietnamese scrap buyers stayed away for the last one month from bulk scrap bookings, owing to Covid curbs. Limited offers were reported at $460-470/t CFR Vietnam levels. However, very few deals were heard at this level.

Japan's scrap exports drop 22% in Jul'21 m-o-m on reduced China, Vietnam shipments: Japan, one of the leading ferrous scrap exporting countries, recorded 0.57 million tonnes (mn t) of overseas sales of the material in Jul'21 as against 0.73 mn t in Jun'21, down 22% m-o-m, as per customs data maintained with SteelMint. Exports decreased owing to limited buying from Vietnam and China.

On the other hand, strong domestic demand and higher prices kept Japanese domestic scrap prices supported. On a y-o-y basis, scrap exports registered a fall of 19% as compared to 0.70 mn t in Jul'20.

Japan: Tokyo Steel lowers scrap buy price by $5/t for Sept'21: Japan's leading EAF steel mill, Tokyo Steel, has cut back scrap purchase prices for the first time in Sept'21.

• The company has decreased prices by JPY 500/t ($5/t) for one of its steelworks, effective from today.
  
  
• Post-revision, the company is now paying a bid price for H2 scrap at JPY 47,500/t ($432/t) for the Utsunomiya plant. However, prices for the company's four other steelworks remain unchanged.
  
  

Source: Tokyo Steel
Prices in JPY