SE Asia: Market awaits Kanto tender outcome for scrap price clarity

The South East Asian market had been quiet since the last 7-10 days amidst the Tet holidays. The market saw a slow start today, being the first working day after the holidays. Steel mills were seen operating at lower capacity utilization, which, in turn, kept demand of ferrous scrap limited.

• SteelMint's price indications for bulk Japanese H2 stands at $515/tonne (t) CFR levels, up by $5/t w-o-w.
  
  
• Offers for US-origin bulk HMS 1&2 (80:20) were at $540/t CFR levels before the holidays.
  
  

Market players believe that prices are likely to remain on the higher side over the next few weeks. Buyers would continue their buying in small quantities. However, they need to increase bid prices, SteelMint understands. Also, steel demand is expected to increase once government projects and construction activities start, which are yet to resume, highlighted a source.

Domestic scrap prices expected to rise on improved demand: Prices for H1 and H2 grade ferrous scrap in Vietnam are assessed at VND 11,900/kg ($517/t) and VND 11,600/kg ($504/t), respectively, a decline of 600 VND/kg ($26/t) compared to prices before the Tet holidays. It is expected that prices might increase on expected demand pick up post-holidays and after the Kanto tender outcome.

Other SE Asian markets overview:

• Thailand imported scrap offers up $5-10/t: Central America-origin HMS 1&2 (70:30) offers in containers have moved up further by $10/t w-o-w to $440-445/t CFR. Higher global scrap prices have pushed up offers in the region.
  
  
• Indonesia: Price indications for the most preferred UK-origin PNS have been assessed at $530-535/t CFR Jakarta towards last week. Limited deals were heard at $525/t CFR levels. Indonesia's imports of ferrous scrap were recorded at 1.44 mnt in CY'21, up 3% y-o-y from 1.40 mnt in CY'20. Australia was the largest supplier with 0.40 mnt, followed by Hong Kong and Singapore with 0.33 mnt and 0.21 mnt, respectively. On a monthly basis, import volumes fell by 13% to 0.14 mnt in Dec'21 as against 0.16 mnt in Nov.
  
  

Outlook

Market players are waiting for the Japanese Kanto tender outcome, which is scheduled to take place on 9 Feb'22. The tender prices are likely to remain on the higher side.