Japan: H2 scrap export offers fall, prices of higher grades stay supported

Japanese H2 scrap export offers dropped this week, owing to lower bids from overseas buyers. Disparities in bids and offers kept some overseas buyers away from the market. Furthermore, the price gap between shindachi and H2 widened due to the high demand but tight availability of the former.

On the other hand, Japanese suppliers are enjoying trading in the domestic market.
Meanwhile, the major Japanese scrap buyers, China and South Korea, opted to wait and watch. As a result, no bids were received this week from the Korean mills.

SteelMint’s assessment for Japanese H2 exports stands at JPY 48,800/tonne (t) FoB, down by JPY 700/t w-o-w.

Chinese scrap buyers quiet: The gap between imported scrap offers and bids is still around $30/t for higher grade HRS101. Thus, Chinese buyers are quiet as it is not workable for both parties, SteelMint learnt from market sources. Offers for HRS101 stand at $560-570/t CFR levels. However, there are few issues that led to fewer scrap bookings this week:

• The Chinese were busy enjoying the 100th year anniversary celebrations of the Communist Party on 1 Jul’21. Thus, trading activities stopped for some time, although today, 2 Jul’21, factories and yards have resumed operations.
• Most steel mills prefer to remain low on steel scrap inventory due to environmental checks in the coming weeks. So, they may have to cut production.
• Finished and semi-finished steel product prices like billets are expected to stay firm on the back of production cuts.

Limited deals from Vietnam, Bangladesh: Imported scrap offers into Vietnam and Bangladesh remained on the higher side high with most buyers out of the market. Offers for the H2 are being quoted at $495/t CFR Vietnam levels, mostly stable w-o-w. It was heard that a Bangladesh-based mill concluded a deal for 23,000 t of bulk Japanese busheling cargo. However, the details remained unconfirmed till the time of publishing this report.

Tokyo Steel’s scrap purchase prices firm: Japan’s leading EAF mill, Tokyo Steel, kept its scrap purchase prices unchanged for this week. The company is paying JPY 49,000/t ($442/t) for the H2 for its Utsunomiya works.