Tokyo Steel manufacturing-one of the key electric arc furnace steel producers has recently booked Chinese ferrous scrap vessels after a long interval.
As per reports, total 17,000 MT ferrous scrap has booked from China for three different works by Tokyo Steel. Three vessels of ferrous scrap were booked out of which two vessels were containing 6,000 MT each and 3rd vessel was of 5,000 MT ferrous scrap. The first vessel is expected to arrive at Kyushu works of Tokyo Steel this week and following two cargos will arrive at Tahara and Okayama works respectively in coming time. However, import price of the cargoes could not be confirmed.
It must be noted that the vessel arriving this week was booked from Hong Kong while remaining both vessels were booked from a port in Tianjin district in China. This time the cargoes were booked for distributed steel scrap rather than miscellaneous dismantled scrap which was imported from Shanghai last time. Tokyo Steel mainly purchased pressed products massively which is equivalent of HMS 2 in global standard (equivalent of H2/H3 in Japan).
Prior to this, the company imported Chinese scrap cargoes in Jun’17 for its Kyushu factories. But owing to quality measures it kept away from importing cargoes in last few months.
Japanese EAF mills are significantly ramping up their billet production in order to fulfill their export contracts. Following this, the companies have increased their scrap purchases.The higher demand for ferrous scrap from these steel producers may support scrap imports further and the price drop would be braked.
South Korea’s leading steel maker – Hyundai Steel placed its bid for Japanese H2 scrap at Yen 30,500/MT, FoB lower by Yen 2,000 from its last bid in September. However sharp price corrections in scrap are less expected in the short run. Recently the price levels for ferrous scrap dropped excessively but prices for billet remained almost stable in the global scrap market.Thus billet prices stood still too expensive compared with the scrap prices.
However, on the contrary, the developed countries in steel production with poor availability of electrode and firebrick have already shifted to billet from steel scrap as steel source. This might put scrap prices under pressure.
~ Inputs from Iru Miru
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