Leading electric arc furnace steelmakers based in major producing regions like Kanto and Gulf region in Japan have recently raised purchase prices and inquiries for domestic scrap in order to fetch more volumes amid ongoing summer and stricter quality control measures. Few of them are presently working with limited inventories of scrap in hand over tightened circulation in the market.
Now average H2 scrap prices for local steelmakers assessed in the range of JPY 35,000-35,500/MT (USD 316-320), FoB for Kanto region in central Japan which have increased JPY 500/MT on W-o-W basis while prices of H2 increased to JPY 34,000-34,500/MT (USD 307-311) in gulf region.
Domestic scrap purchase prices are increasing sequentially in Japan in order to increase purchases ahead of August month. Usually, in August steelmakers operate at full capacities and increase their daily productions resulting in a rise in scrap prices. Also, demand for Tokyo Olympics 2020 is expected to increase in earnest.
Earlier to this, for past few weeks the demand for Japanese scrap had remained dull as most of steelmakers had reduced their production amid ongoing summer. On the other side, the amount of electricity produced on daily basis has fallen sharply leading to an unusual situation of supply-demand, which has tightened further amid summer in Japan. EAF mills may try to maximize their outputs which may keep scrap prices supported.
The demand for H2 has decreased sharply in domestic as well as export market. The market is observing just 70% of its usual cargo movement since past few weeks. Stricter quality inspections and weak appetite for low grade scrap including H2 have pulled market activities down amid heavy heatwaves in daytime in Japan.
Market awaits for Tokyo Steel’s price revision & Kanto Tender bids – Japan’s leading EAF steelmaker Tokyo steel is under plant maintenance activities for next two weeks’ time at its all five works. Market awaits for its price revision at Utsunomiya works located in Kanto region in order to have more clarity on prices.
Amid optimism about rising scrap demand and cheaper electricity prices in domestic market in Japan it will be interesting to see the levels at which bids get fetched in the largest export tender ‘Kanto Tetsugen’ for August.
Trade wise –
1. South Korean Dongkuk steel heard to have fetched limited quantity of Japanese H2 at JPY 34,000/MT, FoB Japan.
2. Japanese H2 bulk offers at USD 350-355/MT, CFR Vietnam.
3. USA origin HMS 1&2 (80:20) offers at around USD 360/MT, CFR South Korea.
4. USA Shredded 211 offers at USD 360-365/MT, CFR Taiwan and around USD 365/MT, CFR Indonesia.
~Inputs from Steel Daily
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