Japanese sellers are optimistic about strong scrap prices in both local and exports markets after the consecutive holidays in Japan.
Before going for golden week holidays which is celebrated from 29th Apr-06th May, Japanese scrap prices witnessed continuous fall amid weakened demand from South Korean steelmakers. However, towards the closing of last week, the prices have increased marginally with improved demand in the market for restocking the scrap before holidays.
Prices have inched up on restocking activities witnessed by steel mills before going on long holidays. Major electric arc furnace steelmakers have increased their purchase prices for domestic scrap while many manufacturers raised bidding prices by upto JPY 500/MT by individual correspondence in order to secure inventory necessary for operations during large consecutive holidays.
Recently bids presented by most of the EAF steelmakers in Kanto region for special grade H2 increased to JPY 32,500/MT (USD 296) indicating steady increase against bottom seen at JPY 32,000/MT and the last report of price index for Kanto region by Japan Iron and Steel Association at JPY 32,200/MT on 27th Apr’18.
In addition to strong shipments on the Kanto Bay, the demand of electric furnace makers has been tightened as manufacturers of electric furnace makers strengthened the movement to secure inventory by taking measures against large consecutive holidays. However, the Gulf prices for (H2) remained flat in the range of JPY 32,000-32,500/MT.
Japan’s leading steel mill – Tokyo Steel has kept domestic scrap purchase unchanged since 12th Apr’18. The special grade (H2) price of the Tokyo Steel Works at Utsunomiya Plant, which is regarded as a district indicator for the Kanto region, is stable at the level of JPY 33,000/MT and no change has noticed yet. Tokyo Steel fetches JPY 34,500/MT for H2 at largest work in central Japan-Tahara.
Some participants believe that after the holidays, “strong tone will continue in the market in early May” as the stocks available with the manufacturer is at low levels.
On the other hand, South Korean participants look at this as a temporary phenomenon and expect that the trend will be more clear only after holidays, keeping keen attention towards two other major factors such as Japanese rebar demand which is still sluggish and consumer sentiments in Southeast Asia, including Vietnam which has not recovered yet.
~Inputs from Japan Metal Daily
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