Japan: Declining bids from key importing countries keep scrap trade subdued

• Hyundai Steel slash bids for premium grade scrap
• Bids from Vietnam mills fall on slow finished steel demand
• Tokyo Steel lowers scrap purchase prices by $4/t

Japan’s scrap export market continued to see declining bids this week too. Dull demand from prominent importing countries like Vietnam and Bangladesh pulled down offers. SteelMint’s price assessment for Japanese H2 scrap stands at JPY 48,000/t FOB basis, unchanged w-o-w.

Market highlights

• Hyundai Steel lowers bids for premium Japanese scrap: South Korean steel major Hyundai Steel lowered bids for HS grade scrap this week. The company reduced bids by JPY 1,000/t ($9/t) for high-grade HS scrap compared to the last bid presented on 17 Dec’21. Bids are now at JPY 54,000/t ($473/t). However, bids for H2 scrap remain unchanged at JPY 47,000/t ($411/t) FOB, considering the price bottomed out.

• Bid-offer disparity for Japanese scrap in Vietnam: Imported scrap offers from Japanese suppliers for H2 grade were quoted at $480-485/t CFR levels, down further by $5/t against price reported on Monday, 20 Dec’21. On the other hand, Vietnamese scrap buyers were bidding $20-25/t lower than suppliers targeted prices. Meanwhile, negative sentiments slowed down Vietnam’s trade activities.
• Bangladesh likely to resume bulk bookings from Japan: Bangladesh-based major mills continued to seek other prospective scrap sources in the last couple of weeks, owing to high Japanese offers. However, the mills would likely resume soon as prices started falling. Fresh offers for Japanese H2 are being quoted at $530-540/t CFR levels, down by $5-10 as compared to mid-week offers.
• Japan’s Tokyo Steel cuts scrap procurement prices by JPY 500/t ($4/t): Tokyo Steel reduced scrap purchase bids by JPY 500/t ($4/t) for two of its steelworks effective 24 Dec’21. Post-revision, the company’s bid price for H2 scrap stands at JPY 53,500/t ($468/t) delivered to the Tahara and Utsunomiya plants, while prices for the other plants remain unchanged. Notably, this is the company’s third price cut this month.

Source: Tokyo Steel
Prices in JPY

Outlook: The wide gap of JPY 6,500/t ($57/t) between export and domestic prices in the Kanto region has put Tokyo Steel under pressure. The steelmaker is likely to lower its bid price further in the near term.