East Asia: H2 scrap prices edge up as firm US market, higher freight support offers

• South Korean buying interest improves on favorable currency
• US deep-sea scrap offers gain on firm domestic market

Japan’s H2 ferrous scrap export market remained broadly stable during the week ended 31 August, with rangebound offers and cautious Vietnamese buying limiting trading activity. Firm US domestic scrap prices supported deep-sea export offers, while higher freight costs continued to underpin seller expectations.

Weekly assessments

• Japanese H2 scrap was at $357/t CFR Vietnam, up by $4/t w-o-w.
• Japanese H2scrap was at JPY 48,300/t ($304/t) FOB Tokyo Bay, stable w-o-w.
• US-origin HMS 80:20 bulk stood at $372/t CFR Vietnam, up by $4/t w-o-w.

Japan

Japanese H2 export prices remained stable at JPY 48,300/t ($304/t) FOB Tokyo Bay. A trader commented that Vietnam offers were heard at $360-365/t CFR, while buyers sought lower levels amid weak steel demand and expected billet arrivals. Japanese suppliers held targets at JPY 48,500-49,500/t FOB.

Tokyo Steel cut H2 purchase prices by JPY 500/t at Tahara on 26 August, marking its fifth cut in August. Prices fell to JPY 47,000-49,500/t ($295-311/t) DAP, while other plants remained unchanged.

A local mill source said, “Sufficient material availability has reduced the need for immediate scrap purchases. Despite softer bids, Japanese sellers remain reluctant to accept lower levels.”

The cut reflected sluggish steel demand, cautious buying and limited upward momentum in the scrap market. Japanese FAS collection prices remained stable at JPY 45,000-47,000/t ($282-294/t), while rangebound export offers and weak Vietnamese buying continued to weigh on sentiment.

Vietnam

Vietnam’s deep-sea scrap market firmed slightly, with HMS 80:20 assessed at $372/t CFR and US-origin offers around $375/t. However, buying interest remained limited as mills held sufficient inventories amid weak long-steel demand and competitive billet availability.

Japanese high-grade scrap offers were heard at $390-395/t CFR, but failed to attract significant buying interest. Meanwhile, higher freight costs from Japan continued to support seller expectations, with freight reportedly rising by $6-7/t over the past two weeks.

Despite subdued scrap buying, Vietnam’s rebar market remained broadly stable. Improved construction activity and rising oil costs continued to support expectations of higher steel prices, although demand remained moderate.

Outlook

Japan’s H2 scrap market is expected to remain rangebound in the coming days as cautious Vietnamese buying offsets firm freight and replacement costs. US domestic strength may keep deep-sea offers supported, while billet availability could limit regional scrap demand.