- Mills resist buying amid elevated inventories
- Subdued demand may further reduce prices
Japan’s H2 ferrous scrap export prices fell by JPY 550/tonne (t) ($4/t) w-o-w in end-July, driven by subdued demand.
H2 offers to Vietnam were heard at $312-315/t CFR, reflecting cautious sentiment. Bids were mostly below $310/t, with the tradable level reported at $310/t.
Demand for H2 stayed weak due to the monsoon season, high mill inventories, and slow finished steel sales, market sources said.
A market participant stated that most Japanese mills will see production cuts in August due to electric furnace maintenance and power-saving measures. This could lead to an oversupply of domestic scrap, further pressuring export prices in the coming weeks.
BigMint’s weekly assessment placed H2 scrap down by JPY 550/t ($4/t) w-o-w at JPY 40,700/t ($276/t) FOB Tokyo Bay.
Import market updates
Vietnam: In Vietnam, H2 prices dropped due to weak demand and ongoing monsoon disruptions. Despite the weaker yen, which usually improves export competitiveness, Vietnamese mills showed little interest amid sluggish rebar sales and sufficient inventories. A Vietnam-based mill source said construction activity is currently in the off-season, prompting buyers to prefer domestic and short-sea scrap.
Japan’s export flows added further pressure, as slow demand in other Asian markets led suppliers to redirect more cargoes to Vietnam. This increased supply in an already slow market pushed prices lower. Mills in Vietnam, particularly in the northern and central regions, continued to limit scrap purchases, waiting for clearer demand signals.
South Korea: South Korea’s scrap inventory at major mills fell 25,000 t to 891,000 t in late July, ending a five-week rise. Central stocks dropped 6.1%, while southern stocks rose 2.5%. Despite the dip, overall inventories remained high.
Meanwhile, about 40,200 t of imported scrap arrived to ease the tight local supply. Gwangyang led with 25,200 t but faced congestion; Incheon, Gunsan, and Dangjin also saw arrivals.
Taiwan: Imported scrap prices in Taiwan edged up, with US HMS 80:20 at $298/t CFR and Japanese H2 at $305/t CFR. Despite this, mills stayed cautious.
Feng Hsin Steel kept its domestic rebar and local scrap prices unchanged at TWD 16,200/t ($552/t) and TWD 7,800/t ($266/t) for 21-25 July.
Outlook
Japan’s H2 scrap export prices may face further downward pressure in the near term as regional demand remains subdued. With mills in key markets such as Vietnam showing limited buying interest amid high inventories and monsoon disruptions, Japanese suppliers could struggle to secure higher prices. Even the weakening yen has failed to significantly lift competitiveness.
Leave a Reply