Japan's scrap export prices continue to trend lower

Japan's export offers for scrap dipped due to weak downstream demand and no deals were heard of late. Overseas and domestic demand remain tepid. Moreover, supply is outstripping demand. No firm bids were heard from Vietnam; buyers have quoted workable levels below $390-400/t. However, firm bids were received from major South Korean mill, Hyundai Steel, on 20 April at low levels.

SteelMint's assessment for Japanese H2 scrap prices stands at JPY 49,000- 49,500/t FOB, slightly down on limited trades.

Major Japanese steel mill, Tokyo Steel, decreased its domestic scrap bid prices by JPY 500-1,000/t on 21 April. Post-revision, prices for H2 scrap stood at JPY 50,000/t ($374/t), delivered to the Utsunomiya plant, JPY 51,500/t ($385/t) to Tahara, and JPY 51,000/t ($381/t) to Okayama.

Additionally, the Japanese market will be less active due to the upcoming Japanese Golden Week holidays, which might have an impact on the market.

Market highlights

South Korea

South Korea's Hyundai Steel reduced bids for imported Japanese scrap by JPY 1,000/t ($7/t). Bids for H2 scrap stood at JPY 48,800/t ($362/t) FOB. H1&2 (50:50) stood at JPY 49,300/t ($366/t) and those for HS grade were at JPY 52,300/t ($388/t). The company continued to reduce prices amid lower domestic rates. The last revision was made on 6 April.

Downward pressure on South Korea's domestic scrap prices persisted as Hyundai Steel placed a bid for Japanese scrap on April 20. This move, coupled with bearish market sentiments, affected downstream markets. Major steel companies like SeAH Besteel, Daehan Steel and Korea Steel reduced scrap buying prices by KRW 10,000/t ($8/t).

"Buyers must acquire scrap cargoes this week because Japan will soon be on vacation, and suppliers are not in a hurry to sell," said a South Korean trader.

Vietnam

Due to continued domestic market bearishness, which was impacted by weak demand in the downstream industries, imported scrap prices in Vietnam fell. Weak sentiment in the domestic and international markets led to revision in offers for bulk H2 scrap of Japan origin, which fell by $5/t to $410-415/t CFR Vietnam from last week.

In the southern part of Vietnam, bids for 3-6 mm scrap sent to mills decreased further, reaching $375/t.

Outlook

Due to the upcoming Golden week holidays in Japan, export activities might get hampered for almost a week. Prior to which, active procurement by major consumers like South Korea and Vietnam might be seen in the coming week. However, the situation in Vietnam may remain dull due to lack of demand.