Japanese scrap export prices firm up on higher bids from South Korea, Vietnam

• Hyundai Steel lifts bids for Japanese scrap
  
  
• Japanese yen depreciates to six-year low against USD
  
  

Japanese scrap export offers have increased further and leading buyers have increased their bids. Buyers such as Taiwan and Vietnam are likely to show increased interest as the Japanese Yen has depreciated against the dollar.

Despite the weak currency, scrap export offers are still at high levels. Currently, the JPY has hit a six-year low and is being traded at 121.5 levels against the dollar.

SteelMint's assessment for Japanese H2 scrap export prices stands at JPY 65,000/t ($534/t) FOB, up by JPY 2,500/t ($20/t) w-o-w. Prices have climbed to JPY 8,000/t from the beginning of the month.

Buyers' market overview

• Hyundai Steel raises bid for Japanese scrap: South Korea's Hyundai Steel hiked bids for Japanese scrap yesterday by up to JPY 3,500/t ($29/t) compared with the last bid on 17 March. Bids for H2 grade have risen by JPY 1,500/t and high-grade scrap by JPY 3,500/t. Bids for H2 grade are now at JPY 65,000/t ($534/t), while for HS grade bids are at JPY 70,500/t ($582/t) FOB. Japanese currency depreciation resulted in the price hike. Furthermore, demand from South East Asia has revived.

  

  Further, Hyundai steel has signed a contract for Russian A3 scrap earlier in the week. The cargo contains 30,000 t of material, booked at a price of ($620/t) CFR. The material is expected to arrive in South Korea in early-Apr'22.Mills are trying to pile up inventory to overcome insufficient stock levels caused by high procurement prices. Scrap inventory at South Korea's major steel mills is showing mixed trends, with the in-hand inventory level in the factories recorded at 725,000 t, up 19,000 t as against last week, or up by around 3%.
  
  

• Vietnam resumes enquiries for Japanese scrap: A Vietnamese mill booked Japanese H2 material recently at $605/t CFR levels last weekend; however, offers have now increased to $630/t CFR. Interestingly, mills had delayed the bookings for about a month due to high offers for Japanese material. But the currency depreciation pulled the buyers attention for Japanese scrap.
  
  

Japan's Tokyo Steel lifts scrap buy prices by $8/t: Tokyo Steel has raised scrap purchase prices for the fourth time this month. The company increased bids by $8/t for the Tahara and Utsunomiya plants. Post revision, the company's bid price for H2 scrap stands at JPY 64,000/t ($529/t) delivered to Tahara and Utsunomiya effective 23 Mar'22.

The price gap between the domestic and export price in Kanto region synchronizing now with the hike in export prices, which may lead to active resumption in exports.

Outlook: Considering the recent depreciation of the yen, Japanese scrap suppliers are expected to enjoy export advantage.