Japan’s ferrous scrap exports touched 11-year high at 9.1 mn t in CY’20, registering an upsurge by 23% y-o-y, as per data maintained with SteelMint. This surge was driven by increased demands from Bangladesh, Vietnam and Taiwan.
Japanese export observed a significant rise of 11% m-o-m and stood at 0.73 mn t in Dec’20. Vietnamese scrap buyers were actively restocking scrap cargoes on improved billet demand which resulted in an increase in scrap imports.
Japan produced 83.2 mn t of crude steel in CY’20, down by 16% y-o-y as compared with CPLY, according to the WSA data.
Factors governing rise in scrap exports in CY’20 –
- Vietnam remained the topmost buyer in CY’20 – Vietnam scrap imports volume from Japan reached 3.41 mn t in CY’20, sharply up by 54% from from a year ago, followed by South Korea at 2.86 mn t, registering a decrease by 25% y-o-y, while Taiwan stood at 1.04 mn t, up by 73% in CY’20. Vietnam’s construction and manufacturing sectors played a key role in leading the economic growth. Growth in industry and construction sector stood at 5.6% y-o-y basis.
Increasing domestic finished steel demand, Vietnam based steel mill booking Japanese scrap more aggressively at increased levels. Interestingly, Vietnam remains the winner in Japan’s Kanto tender result as the country has booked few cargoes for Jan’21 shipments.
- Exports to Bangladesh continues to grow on steel ramp ups – Volumes to Bangladesh continued to see growth with 2020 volumes at 0.87 mn t, increasing almost 2.7 folds from CY’19. Bangladesh’s steel sector had a steel production capacity of 7 mn t in CY’19. After the ramp-up, the steel production capacity has reached around 8.5 mn t in CY’20.
- Decline in prices – H2 scrap prices delivered to Tokyo Steel’s Tahara plant stood at JPY 26,590/t in CY’20, down by 7% JPY 28,490/t in CY’19.
Outlook – With China lifting the restrictions on ferrous scrap imports, Japanese scrap exporters may turn active in supplying material to them in the near term.
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