Japan: Ferrous Scrap Exports Fall 14% in July on Falling Chinese Purchase

Japan, world’s third largest ferrous scrap exporter after EU-28 and US, has witnessed a considerable fall in its scrap exports in Jul’18. As per recent customs data, Japan exported 594,674 MT ferrous scrap in Jul’18 witnessing a fall of 14% Y-o-Y as against 690,040 MT scrap exports in Jul’17.

On monthly premises, Japan’s ferrous scrap exports noted a marginal plunge of 6% M-o-M as compared with 635,265 MT ferrous scrap exports recorded in Jun’18. Slowdown in activities amid summer could have resulted in fall in scrap exports and crude steel production in Jul’18. As per statistics released by World Steel Association, Japan’s crude steel production observed second successive fall which stood at 8.42 MnT in Jul’18 as against 8.75 MnT in Jun’18.

Japanese scrap export prices turn up in Jul’18 – Average Japanese H2 scrap prices turned up at JPY 34,500-35,000/MT, FoB in mid-July after witnessing downturn in second half of Jun’18 to the levels of JPY 33,000-33,500/MT, FoB. Higher scrap exports prices as compared to global levels could have resulted in slowdown in export activities from Japan in Jul’18.

South Korea imported 318,431 MT ferrous scrap occupying 54% share in Jul’18 from Japan, up 3% M-o-M as against 307,915 MT in Jun’18. Vietnam imported 130,005 MT (down 15% M-o-M) and China imported 81,816 MT (up 28% M-o-M) from Japan followed by other major importers like Taiwan (55,895 MT), Indonesia (3,985 MT) and Malaysia (1,948 MT).

Japanese ferrous scrap exports declined 7% during Jan-Jul’18 – Japan exported 4.27 MnT ferrous scrap during Jan-Jul’18, down 7% Y-o-Y as against 4.61 MnT exports during the same period last year. Falling demand from major importers like China, Taiwan and Asian markets, slowdown in purchases of low grade and H2 scrap from South Korea along with strong domestic demand on Olympics-2020 constructions have resulted in lowering scrap exports from Japan in CY18.

South Korea remains largest importer of Japanese scrap – Japan exported highest 2.43 MnT ferrous scrap to South Korea occupying 57% of total exports during Jan-Jul’18. Although South Korean scrap imports showed 8% Y-o-Y growth as against 2.24 MnT during same period CY17, its demand weakened sharply in last two months on higher Japanese scrap prices compared with global scrap prices.

Second largest buyer Vietnam imported 0.85 MnT, up 4% Y-o-Y occupying 20% share. Followed by other importers like China (0.58 MnT, -43% Y-o-Y), Taiwan (0.29 MnT, -9% Y-o-Y), Indonesia (0.05 MnT, +67% Y-o-Y) and Bangladesh (0.04 MnT, -56% Y-o-Y).

During the first seven months of 2018, Japan’s crude steel production edge up marginally to 61.39 MnT which was recorded at 60.91 MnT in the same period last year.

Country-wise Japan ferrous scrap exports –

Quantity in MnT,
Source: SteelMint Stats