Increase in overseas bids lifts Japanese scrap export prices

Japanese scrap export offers moved up for the second successive week. Most prominent Japanese scrap buyers like South Korea, Vietnam, and Bangladesh raised their bids. However, bid-offer price disparity kept Chinese buyers away from the market.

SteelMint’s assessment of Japanese scrap export offers stands at JPY 52,000/tonne (t) FOB ($457/t) levels, up by JPY 3,000/t w-o-w.

Market overview

•  South Korean mills hike bids: South Korea’s Hyundai Steel raised bids for Japanese HS and H2 grade scrap. Bids were raised by JPY 2,000/t ($17/t) for high-grade scrap compared to the last bid presented on 13 Jan’22. Bids for HS scrap are now at JPY 60,000/t ($524/t) and for H2 scrap at JPY 51,000/t ($446/t) FOB. Simultaneously, POSCO has increased bids for Japanese ferrous scrap sharply compared to last bids on 17 Jan’22. Bids for shredded scrap are now at JPY 61,500/t FOB ($540/t) and for HS material are at JPY 63,500/t FOB ($557/t).

  

  As a result of the hike in imported scrap prices, domestic scrap prices in South Korea have also gone up. Hyundai Steel, Dongkuk Steel, Hwan Steel, and a few others have announced a hike in scrap purchase prices from 20-29 Jan’22 by KRW 10,000/t ($8/t), as per SteelDaily. Hyundai Steel raised prices for its Incheon, Pohang, and Dangjin works. The purchase price for Weight A scrap has risen to KRW 630,000/t ($529/t). Dongkuk has increased prices for its Incheon and Pohang plants.

• Offers for Vietnam rise: Two Vietnamese buyers remained the winner of the Kanto Tetsugen scrap export tender this month. A total of 10,100 t of scrap was awarded and the average price for H2 scrap stood at JPY 50,983/t ($442/t) FAS basis. Later buyers stepped back and were delayed in booking another Japanese cargo as offers surged to $510-515/t CFR levels, up by $15/t w-o-w.
• Offers to China skyrocket: Japanese HRS scrap offers to China skyrocketed to around $590-600/t CFR levels, while the bids are comparatively low at $530-535/t CFR levels.

Tokyo Steel’s scrap purchase prices unchanged: Tokyo Steel’s scrap purchase prices have remained unchanged since the last revision seen on 13 Jan’21. The company is paying the price for H2 scrap at JPY 53,000/t ($460/t) delivered to Utsunomiya, while prices for the other plants remain unchanged.

The gap between export and domestic prices in the Kanto region has narrowed down significantly with the hike in export prices in the last couple of weeks, which may lead to active resumption in exports.