East Asia: H2 scrap export market remains under pressure amid weak Vietnamese demand

• Vietnamese buyers continue to prefer containerised cargoes
• Deep-sea bulk market remains subdued on wide bid-offer gap

Japan’s H2 ferrous scrap export market remained subdued during the week ended 20 July, weighed down by weak Vietnamese demand, seasonal rains, and cautious buying. Competitive offers and lower domestic collection prices failed to revive trading, while the deep-sea bulk market remained under pressure amid a persistent bid-offer gap.

Weekly assessments

• Japanese H2 scrap was at $363/t CFR Vietnam, down by $5/t w-o-w.
• Japanese H2 scrap was at JPY 52,250/t ($322/t) FOB Tokyo Bay, down by JPY 100/t ($1/t) w-o-w.
• US-origin HMS 80:20 bulk stood at $373/t CFR Vietnam, down by 2/t w-o-w.

Japan market

Japan’s H2 export market weakened further as more competitive offers and subdued buying from Vietnam pressured prices. Export offers were heard at $365-370/t CFR Vietnam, while buyers maintained bids around $360/t CFR, resulting in only limited transactions, including a deal reported at $362/t CFR.

Domestic H2 collection prices also softened to JPY 51,500-52,500/t ($317-323/t) FAS, reflecting weaker export sentiment following Tokyo Steel’s JPY 500/t H2 purchase price cut and the lower July Kanto tender outcome.

H2 ferrous scrap was assessed at JPY 52,250/t ($322/t) FOB Tokyo Bay, down JPY 650/t ($4/t) w-o-w, highlighting continued weakness in Japan’s export scrap market.

Vietnam market

Vietnamese buyers remained cautious amid the rainy season and weak finished steel demand, limiting purchases to immediate requirements. Containerised scrap continued to attract relatively better interest than bulk cargoes due to greater procurement flexibility.

Deep-sea bulk scrap trading also remained weak. US-origin HMS 80:20 offers were heard at $375-380/t CFR Vietnam, while buyers indicated workable levels closer to $365-370/t CFR, leaving the market largely inactive. Market participants expect procurement to remain slow until construction activity improves after the rainy season.

Outlook

BigMint expects the H2 scrap export market to remain under pressure in the coming week as weak Vietnamese steel demand, seasonal rains, and cautious mill procurement continue to limit buying activity. Deep-sea bulk scrap prices are likely to stay soft amid the wide bid-offer gap, although any recovery in regional steel demand or tighter domestic scrap availability in Japan could provide limited support to export prices.