East Asia: H2 scrap export prices soften on JPY strength, weak Vietnam demand

• Tokyo Steel cuts add pressure on domestic scrap
• Vietnamese mills remain cautious amid weak demand

Japan’s H2 ferrous scrap export market remained under pressure during the week ended 5 August as JPY appreciation, repeated domestic price cuts, and weak Vietnamese finished steel demand weighed on buying interest. However, limited deep-sea availability and elevated freight costs prevented a sharper decline.

Weekly assessments

• Japanese H2 scrap was at $360/t CFR Vietnam, stable w-o-w.
• Japanese H2 scrap was at JPY 48,500/t ($307/t) FOB Tokyo Bay, down by JPY 2,100/t ($13/t) w-o-w.
• US-origin HMS 80:20 bulk stood at $372/t CFR Vietnam, stable w-o-w.

Japan

Japanese H2 scrap offers to Vietnam were heard at $360-362/t CFR, broadly stable w-o-w, while a lower offer at $355/t CFR remained unconfirmed. Sellers largely adopted a wait-and-see approach amid the stronger JPY and uncertainty ahead of the Kanto tender.

H2 collection prices declined to JPY 47,500-48,800/t ($300-308/t) FAS, while FOB Tokyo Bay prices fell to JPY 48,500/t ($307/t), down JPY 2,100/t ($13/t) w-o-w.

Tokyo Steel announced its third H2 scrap price cut in August, reducing prices by JPY 500-1,000/t across all plants from 8 August. This marked the eighth consecutive cut since July, with H2 purchase prices now at JPY 48,000-51,000/t DAP at major plants.

Japan’s August Kanto export scrap tender averaged JPY 49,086/t FAS ($310/t), down JPY 3,422/t ($21.5/t) from July. The 20,000 t tender attracted 12 bids totaling 105,400 t and is scheduled for shipment to Bangladesh by 30 September. Estimated landed cost is above $380/t CFR Chattogram, broadly matching current Japanese H2 import parity.

Vietnam

Vietnamese H2 scrap demand remained subdued as weak finished steel sales encouraged mills to maintain need-based procurement. Japan-origin H2 was offered at $360-362/t CFR Vietnam, while the latest reported transaction was around $355/t CFR.

Deep-sea scrap trading remained limited, with US-origin HMS 80:20 offered at $378-380/t CFR Vietnam against bids near $365/t, while indicative buying levels stood at $358-360/t. High freight costs and limited offers continued to restrict activity, with some suppliers holding back cargoes.

Outlook

Japan’s H2 export market is expected to remain range-bound to slightly weaker next week. Further domestic EAF price cuts and sluggish Vietnamese demand could weigh on sentiment, although tight deep-sea availability and elevated freight costs are likely to limit downside.