Japanese scrap export prices fall slightly on lower bids

Japanese scrap prices have shown some correction in both overseas and domestic markets. Despite the Kanto tender concluding last week at an average price of JPY 46,646/t ($423/t) FAS above market price, lower bids from overseas countries have slightly weakened the sentiments. Other potential buyers like Bangladesh and Vietnam remained on the sidelines this week.

SteelMint's price assessment for Japanese H2 scrap exports stands at JPY 45,000/tonne (t) FoB, down by JPY 500/t compared to last week.

On the other hand, Japanese suppliers were highly active in trading in the domestic market, due to high demand.

• Hyundai Steel lowers bids for Japanese scrap: South Korean steel major Hyundai Steel has reduced bids for Japanese ferrous scrap by JPY 1,000/t ($9/t) against the last bid placed on 20 Aug'21, sources informed SteelMint. The company cut the bid prices to take advantage of high availability of domestic scrap inventory.
  
  

The bid price for H2 scrap is now set at JPY 44,000/t ($400/t) FoB. The bid price for H2 grade is lower than Japan's market price. Bids for premium Japanese Shindachi bara scrap have settled at JPY 62,500/t FoB ($568.5/t).

Source: SteelMint

• Another major steel player, POSCO, has concluded a deal for Japanese higher-grade scrap, namely HS and shredded. Around 10,000 t of HS were concluded at JPY 62,500/t CFR and 5,000 t of shredded, but the price for the latter remained unconfirmed.
  
  
• Dongkuk Steel has signed a contract for 6,000 t of Russian A3 scrap cargo. The price for scrap was reported at $480/t on a CFR basis, a decrease by $15/t against the previous deal concluded by Hyundai Steel on 2 Aug'21.
  
  
• Vietnam mills still struggle with Covid restrictions: Vietnam and Bangladesh, the major Japanese scrap buyers, continued their silence for yet another week as no deal was heard from these countries. Vietnam's imported scrap market remained subdued on rising Covid cases and extended lockdown in the country. H2 bulk scrap is being offered at $475-480/t CFR Vietnam level, whereas buyers' expectations are on the lower side.
  
  
• No bulk scrap deals reported in Bangladesh on bid-offer disparity: Bangladesh's bulk scrap import market remained inactive due to low buying interest, SteelMint learnt from sources. US-origin shredded scrap offers stand at $550/t CFR Chittagong. On the other hand, Bangladeshi steel mills are bidding $20/t lower than the current offers. Due to bid-offer disparity, the market remains silent at the moment.
  
  
• Chinese buyers away from booking Japanese scrap: A few Chinese scrap buyers are opting to stay away from the Japanese market, and actively booking semi-finished steel (billets) at more favourable prices. However, few offers for South Korean scrap were heard around $560/t levels. However, due to bid-offer disparity, no major trade was reported.
  
  
• Japan's Tokyo Steel trims scrap purchase prices by $5/t: Japan's leading EAF steel mill, Tokyo Steel, has lowered scrap purchase prices for the fourth time in Aug'21. The company has decreased prices by JPY 500/t ($5) for all its five steelworks, effective from tomorrow (28th Aug'21). After today's revision, the company would pay a bid price at JPY 48,000/t ($436/t) respectively for H2 scrap delivered at Tahara and Utsunomiya works. Notably, bid prices have been cut by a total of JPY 1,500/t this month from the Tahara steel plant.
  
  

Prices in JPY
Source: Tokyo Steel

Outlook
The bids put in by Hyundai seem to be below the market price. It would be interesting to see if sales are done at these price levels.