Japanese domestic scrap market remained flat in terms of prices since the past couple of weeks. Japan’s domestic mill – Tokyo Steel has not revised scrap prices since 8th Jan’19 amid maintenance at few of its plant. However, interest in the market is increasing as the co-movement of the Korean and Japanese scrap markets becomes clearer.
The recent price bidding for H2 stands in the range of JPY 28,500-29,500/MT (USD 260-269) according to sources, recently a steelmaker purchased H2 scrap at JPY 29,000/MT (USD 264).
Japanese local scrap market shows mixed sentiments by the region. The market participants are paying high attention towards the Kanto region in absence of ample supply. Participants believe that the bottom has been already reached of Kanto market. It began to attract attention from both the local and export point of view.
‘Kanto Tetsugen’ monthly scrap tender scheduled on 13th Feb’19 – Following the rising global scrap prices especially in Turkey, Gulf region based scrap sellers are showing signs of raising the prices mainly for low-priced scrap.
According to sources, monthly export tender ‘Kanto Tetsugen’ is scheduled on 13th of this month and the Kanto Iron and Steel Association is scheduled to ship 10,000 MT of scrap this weekend. Moreover, the demand from EAF steel makers has been rising sharply as few are operating even in the night time.
Although Funabashi factory of Kokuto Steel has resumed steelmaking operation since last week, the resumption of scrap purchases is likely to observe after the mid of February on an accumulation of inventory of 30,000 MT scrap in hands. Thus the result of Kanto Tender gathers the attention of all participants.
Despite a downward trend in the prices last month, there has been a steady rise as the recent contract shipment in the Kanto Gulf region continues.
Although the number of cargoes getting booked is less, there is no tight supply-demand situation at the moment, however, the sentiments have turned positive for the price hike.
“There is ‘increasing price’ environment in the Kanto Gulf region, so it is unlikely that steelmakers in the Kansai region will be able to cut their purchase prices. There is also a prospect that spot supply will come out as delivery volume decreases.” shared an industry participant.
South Korean demand likely to put less impact on Japanese price – The volume of transactions to South Korea, which is the main export region, is not enough on weak demand but there are many indications that it is possible to stay away from buying after booking a lot of cargo in Jan’19 and thus it is not likely to lead to a rebound.
~ Inputs from Japan Metal Daily
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