Japan's ferrous scrap exports down by over 10% m-o-m in July'23

Japan's ferrous scrap export volumes stood at 0.54 million tonnes (mnt) in July 2023, marking a 11% decline against 0.61 mnt a month ago, as per Customs data maintained with SteelMint. Y-o-y, export volumes rose 32% against 0.41 mnt seen in July 2022.

In January-July 2023, exports rose 12% to 3.86 as against 3.44 mnt in the same period of last year.

Country-wise exports

South Korea: South Korea, the largest importer of Japanese scrap registered imports at 0.25 mnt in July, down by 19% as against 0.31 mnt in the preceding month. However, y-o-y, scrap imports jumped 39% against 0.18 mnt seen in July 2022. The slowdown in demand for finished steel from the real estate sector within Korea has prompted steel mills to delay their procurement of raw materials.

Vietnam: In July, Japan's exports to Vietnam amounted to 100,731 tonnes (t), representing a decrease of around 4,000 t compared to the 104,451 t shipped in the previous month. However, y-o-y, exports saw a substantial increase of over 15% from 87,033 t recorded in July 2022. The challenge faced by Vietnamese mills in maintaining their conversion spread from scrap to finished steel, coupled with bid-offer disparities, contributed to subdued buying activity from Vietnam.

Taiwan: In July, Taiwanese mills imported approximately 0.09 mnt of scrap from Japan, marking an 18% decrease compared to 0.11 mnt imported in the previous month. However, y-o-y, imports to Taiwan surged by 50% when compared to the 0.06 mnt recorded in July 2022.

Japan's H2 scrap prices: Japan's average monthly H2 scrap prices aggregated to JPY 49,000/t ($335/t) in July, up by a mere JPY 40/t ($0.27/t) against JPY 48,960/t ($334.62/t) in June 2023.

Semi-finished exports: Japan's billet exports were recorded at 0.26 mnt in July 2023, up by over 11% against 0.23 mnt a month ago. Y-o-y, exports jumped 18% against 0.22 mnt seen in July 2022. South Korea remained the largest importer at 0.1 mnt in July, followed by Taiwan and Thailand at 0.08 mnt and 0.06 mnt, respectively.

Outlook: The ferrous scrap export market in Japan is likely to see a drop in volumes from major importers like Vietnam, South Korea, and Taiwan due to a higher bid-offer disparity. Similarly, buyers like Bangladesh might not entertain offers from Japan due to the availability of other options in scrap sourcing as per market sources.