Japanese domestic scrap prices rise tracking hike in export offers

• Hyundai Steel raises bid for Japanese scrap, books Russian cargo
• Offers for Bangladesh and Vietnam rise
• Tokyo Steel raised scrap purchase price twice this week

Japanese scrap prices have witnessed a northward movement both in domestic and export market. After remaining silent for the last couple of weeks, South Korean mill – Hyundai Steel has increased its bid price for Japanese scrap by up to JPY 4,000/t, sources have confirmed to SteelMint. The bid for H2 is now set at JPY 43,000/t ($395) FoB level, up by JPY 3,000/t ($27) against the last bid which was on 26th Mar’21. It was in line with the market expectations that South Korean mills will raise their bids so as to catch up with higher bids seen in Kanto Tender last week.

In addition to it, the company has booked Russian bulk scrap cargo, as per SteelDaily report. The cargo comprises around 20,000-30,000 t of Russian A3 scrap and the deal was concluded at $445/t CFR level. Prices have increased measurably by $20/t against last Russian cargo booked by the company on 25th Mar’21.

SteelMint’s assessment for Japanese H2 scrap export now stands at JPY 44,000/t ($404) FoB, up by JPY 500/t ($5) w-o-w.

Bids in Kansai scrap export tender rise by $27 m-o-m: Japan’s Kansai-Cheorwon, scrap export tender was concluded with bids increasing by $27 m-o-m, following the successful hike in Kanto scrap export tender conducted last week. The winning bid in Kansai was awarded a total of 5,000 t of Japanese H2 at an average price of JPY 42,960/t FAS ($395), in comparison to JPY 39,950/t in the last tender of Mar’21, as per Steeldaily. Market participants expect that additional bulk cargo booking is likely to happen next week.

Offers to Bangladesh & Vietnam rise further: The ongoing Ramadan month kept Bangladesh-based buyers active in the market last week, which resulted in active bulk cargo bookings from US and Australia. High offers turned buyers cautious for fresh bookings. Fresh offers for Bangladesh for H2 are now being quoted at a $480/t CFR Chittagong basis.

Meanwhile, Vietnam buyers remain active in booking bulk scrap from Japan. Offers for Japanese H2 to Vietnam are now available at $465/t CFR levels.

Tokyo Steel raised scrap purchase price for second time this week: Japan’s leading EAF mill – Tokyo Steel has announced two price hikes on 13th & 15th Apr’21. The company is now paying JPY 44,000/t ($403) and JPY 42,000/t ($385) for H2 scrap delivered at Tahara and Utsunomiya works respectively. Higher scrap export prices and improved domestic demand have led to price hikes in the domestic market.

Outlook: Japan’s domestic scrap purchase price may increase further, ahead of the approaching Golden week holidays, on higher scrap export offers. Active Japanese scrap demand from China and Vietnam are likely to keep export offers supported and thus local mills may have to raise their bids in order to secure volumes.