Tokyo Steel Continues to Buy Ferrous Scrap from China - Sources

Tokyo Steel - Japan's leading steel producer continues to buy Chinese ferrous scrap. This is the second cargo of Chinese scrap bought by the company. Prior to this, the company had booked around 1,000 MT ferrous scrap from China as a due diligence measure.

As per the updates received from MIRU, Japan based research house, the steel maker has booked around 2,400 MT shredded ferrous scrap from China for its Kyushu factory. The cargo is expected to arrive on 02 Jun'17. Unlike first cargo which was of lower grade, this 2nd cargo is processed one. Also the supplier for the 2nd cargo is different from the cargo bought earlier.

With Chinese government working strictly against environmental pollution, ferrous scrap exporters (predominantly in Taizhou region of China) would be looking up for exporting it before it gets ruined by rains during monsoons. Thus export seems out to be the most feasible way as it cannot be stored indoors. This might further lead to speeding up of Chinese ferrous scrap exports in the near term.

Korean steel makers also booking Chinese cargo

Hyundai Steel - the largest buyer of Japanese scrap is also heard to have purchased Chinese Shredded ferrous scrap of quantity around 10,000 MT. The company submitted lower bids at Yen 24,000 /MT, FoB basis against the previous bids in the Japanese floated tender.

Thus it is clear that the two largest parties that used to govern prices of Japanese scrap have started showing interest in Chinese scrap. This might further push ferrous scrap exports from China in the coming time.

Notably Chinese ferrous scrap exports were recorded at 15,000 MT in the month of Apr'17, which is the highest ever exports in any month only 1,000 MT less than last year.

~Inputs from IRU-MIRU