Bids for Japanese scrap continue to dip, limited trade reported

Japanese scrap export offers declined considerably in a recent deal struck by a South Korean mill. Strong domestic demand kept the Japanese suppliers more busy. On the other hand, buying countries like Vietnam, Bangladesh, and China lowered bids for Japanese scrap.

SteelMint’s assessment for Japanese H2 scrap exports stands at JPY 48,000/tonne (t) FoB, registering a sharp fall of JPY 3,000/t ($27/t) week-on-week (w-o-w).

South Korean mill books bulk scrap cargoes: South Korea’s Dongkuk Steel recently booked Japanese H2 scrap at JPY 47,000/t FoB basis. Another South Korean major, Hyundai Steel, did not present a bid for Japanese scrap this week. In contrast, it booked a Russian bulk scrap cargo, as per latest reports tracked by SteelMint. The cargo comprises 35,000 t of Russian A3 scrap and the deal was finalised at $499/t, CFR level. Prices have decreased by $6/t against the last deal concluded by Dongkuk for 12,000 t at $505/t, reported early last week.

China’s bid for Japanese scrap falls: Bids from Chinese steel mills for the most preferred Japanese HRS 101 grade have further slumped by $10-15/t, w-o-w. Current bids are at $505-510/t, CFR China. However, no recent deals have been heard by SteelMint. Softening buying interest has resulted in lower bids for imported Japanese scrap.

Japanese scrap offers to Bangladesh, Vietnam fall: Japanese scrap offers to potential buyer countries like Bangladesh and Vietnam have come down on less inquiries. Offers for Vietnam have fallen significantly by $30/t to $500/t CFR Vietnam against the price reported on 24th May’21. No firm offers have been reported for Bangladesh.

Tokyo Steel keeps scrap purchase prices unchanged: Japan’s leading EAF mill, Tokyo Steel, kept its scrap purchase prices unchanged this week. The company is paying around JPY 51,500/t ($473/t) for the Tahara plant and JPY 48,000/t ($440/t) for its Utsunomiya works.

Outlook
Japanese scrap export offers are likely to come down further on sustained volatility in Chinese steel futures prices and lower bids. This may pressure Japanese domestic scrap prices as well.