Japanese scrap prices fall after two-months as Tokyo Steel lowers bids for Tahara

• Tokyo Steel cuts scrap procurement prices after a gap of 2 months.
  
  
• POSCO lowers bid prices for Japanese scrap.
  
  
• Trade to Bangladesh, Vietnam subdued on higher offers.
  
  

Japanese scrap prices have shown a slight correction this week after trade slowed down at higher offers. Japan's leading steel producer, Tokyo Steel, has cut its scrap purchase prices after a gap of two months. The steelmaker has lowered bids by JPY 1,000/t ($9/t) for its Tahara steelworks, effective from 30 Oct'21.

Post-revision, the company's bid price for H2 scrap stands at JPY 58,000/t ($511/t) for the Tahara works (Central Japan), while prices for the other Tokyo Steel's plants remain unchanged, as per reports. Interestingly, the prices have seen a total increase of around JPY 11,000/t ($96/t) in the last two months. The company did not cut prices at its Kanto region-based Utsunomiya plant and continues to pay JPY 56,000/t ($493/t) delivered to plant.

Price in JPY/t
Source: Tokyo Steel

Lower bids from Korean mills

South Korean mills have lowered bids for Japanese scrap, but have booked cargoes from Russia, and USA.

South Korean steel major POSCO, today, lowered bids for Japanese ferrous scrap after two months , as per SteelDaily. Bids have come down by JPY 2,500/t ($22/t) for shredded grade to JPY 65,500/t ($576/t). Bids for HS material are now at JPY 68,500/t ($603/t).

In contrast, another South Korean steel giant, Donkuk Steel, booked 40,000 t of Russia-origin A3 grade scrap at $549/t CFR. Further, a 30,000-t, US-origin bulk scrap HMS 1 cargo was booked at $542/t CFR for Nov-Dec'21 arrival, as per SteelDaily reports. Prices have increased by around $15/t compared to previous bookings. The contract is expected to help the company alleviate the shortage in scrap supply.

With Dongkuk Steel's latest bulk scrap bookings, South Korean mills are likely to follow the same path and book cargoes from USA and Russia, instead of paying higher prices for Japanese bulk cargo.

Vietnam buyers remain on sidelines

Vietnamese scrap buyers remained on the sidelines in relation to booking bulk cargo from Japan due to the higher imported prices. Imported bulk Japanese H2 is being offered at $550-560/t CFR Vietnam levels while no fresh deal is heard to have been concluded.

Bangladeshi buyers look for other origin cargoes

Bangladesh-based bulk scrap buyers have remained quiet for a long time and have not booked any bulk scrap cargo for the last two-three months, owing to Covid-led lockdowns and discrepancies in bids and offers. "At present, inquiries for bulk scrap have increased. However, buyers will likely book bulk cargo from USAor any other origin over Japanese cargo. Even though offers have come down, they are still on the higher side," said a prominent Japanese bulk scrap trader.

Bulk Japanese H2 offers are heard at around $585/t CFR Chittagong levels but buyers are not interested.

SteelMint's assessment for the Japanese H2 stands at JPY 54,500/t FOB levels, down by JPY 200/t w-o-w.