East Asia: Japanese H2 scrap prices strengthen despite subdued Vietnamese demand

• Firmer deep-sea scrap prices, limited offers lift H2
• Selective Vietnamese buying limits further upside

Japan’s H2 ferrous scrap export prices increased during the assessment week ended 28 September, supported by firmer global deep-sea scrap prices. However, the Silver Week holidays led to limited fresh offers from Japanese suppliers, while Vietnamese mills remained cautious and focused on local scrap amid slow market conditions.

Weekly assessments

• Japanese H2 scrap was at $371/t CFR Vietnam, up by $1/t w-o-w.
• Japanese H2 scrap was at JPY 49,800/t ($316/t) FOB Tokyo Bay, up by JPY 800/t ($5/t) w-o-w.
• US-origin HMS 80:20 bulk stood at $391/t CFR Vietnam, up by $1/t w-o-w.

Japan

Japan’s H2 scrap export prices strengthened, with H2 assessed at JPY 49,800/t ($316/t) FOB Tokyo Bay, up JPY 800/t ($5/t) w-o-w. The increase came as global scrap prices climbed higher.

Fresh Japan-origin offers were limited during the holiday period, with suppliers expected to resume negotiations after the market reopens. Shredded scrap and other export indications were also expected to follow currency movements and overseas market trends.

Vietnam

Vietnamese buyers remained cautious at higher Japanese scrap price levels. H2 offers were heard at around $375/t CFR Vietnam, while indicative bids remained at $360-365/t CFR. An indicative offer at $373/t CFR Vietnam was also heard on 25 September.

A market participant commented, “Mills had no immediate restocking requirements and were focusing more on locally sourced scrap.” However, traders noted that mill inventories were not particularly high, suggesting buying interest could return once prices become workable.

A Japan-origin H2 deal below $370/t CFR Vietnam was reportedly concluded during the previous week, although the transaction could not be widely confirmed.

Deep-sea scrap prices also moved higher, supported by recent increases in Turkiye’s imported scrap market. US-origin HMS 80:20 was assessed at $390-392/t CFR, up $2/t w-o-w, while a US-origin offer was heard at $395/t CFR Vietnam.

In Turkiye, high-grade HMS 80:20 was assessed at $403/t CFR, providing support to Asian deep-sea scrap prices.

Outlook

Japanese H2 scrap prices are expected to remain supported by firmer deep-sea markets and currency movements. However, limited Vietnamese buying, subdued restocking requirements, and the holiday-related disruption to fresh Japanese offers could restrict further gains. Market activity is likely to pick up once Japanese suppliers return to negotiations.