Japanese Scrap Export Prices May Go Up Further – Reports

Japanese ferrous scrap export prices have increased by USD 7/MT in last 2 months and USD 67/MT in last 5 months. This in line with strong domestic demand and growing appetite for higher grade scrap.

Japan is the third largest scrap exporter with an annual volume of 7-8 MnT. Japanese scrap exports have been recorded at 6.01 MnT during Jan-Sept 2017. Largest importer of Japanese scrap being South Korea, followed by China and Vietnam.

SteelMint learned from market sources that scrap buying likely to remain strong in above mentioned countries. Korean mills are eyeing an improved demand in construction activity and Vietnamese mills have to stock before they go on long lunar holidays starting in February.

Fall in Chinese scrap exports

Another reason Japanese scrap prices may go up is expected fall in scrap exports from China, which increased sharply in last three months. With reasonably higher prices in domestic market, Chinese exports have become non- competitive.

Increased steel production

World steel production rose by 6% in first ten months of 2017. This is primarily due to falling steel exports from China in big way and prompting importing counties to go for their own steel production.

World crude steel production recorded at 1,410.5 MnT in first ten months of 2017 versus 1,335.5 MnT during first ten months of 2016.

Key highlights

1. Hyundai Steel resumes scrap imports from Japan at higher price. The bid prices for Japanese H2 scrap were kept at Yen 33,500/MT (USD 299) FoB Japan, against last bid of Yen 30,500-31,000/MT (USD 272-276/MT) on 01 Nov’17.

2. Tokyo Steel continues to increase their purchase price for domestic scrap. Tokyo steel has already raised their purchase price for scrap by USD 40-50/MT in last 45 days. Now H2 scrap fetches JPY 35,500/MT (USD 319) at largest work in central Japan-Tahara.Tokyo Steel books 9,000 MT scrap from Korea owing to better price

3.Korea’s SeAH has bought some parcel from Japan of busheling at around Yen41,500/MT CFR and market expects this prices to go up to Yen 44,000/MT CFR. SeAH is the largest special steel manufacturer in Korea and consumes about 2.5 million tonnes of scrap every year.

Korean steel mills have not been seen very aggressively purchasing scrap owing to high stock level. However stocks of major steel makers in Korea have finally declined by 50,000 MT this week. The table below shows scrap inventory of Korean steel manufacturers delivered & shipped