Japan: Ferrous Scrap Exports Hit 17-Month Low in Mar’18

Japan – third largest exporter of ferrous scrap after EU-28 and US, has witnessed sharp decline in its scrap export volumes in March month. Ferrous scrap export volumes have hit seventeen months low in Mar’18. As per recent customs data, Japan exported 0.53 MnT ferrous scrap in Mar’18 which have dropped lowest since Oct’16 which was at 0.52 MnT then. Falling demand from major importers like South Korea and Vietnam, strong domestic demand along with sharply plunged scrap imports from China and Asian markets have resulted in lowering scrap exports from Japan.

Japan also witnessed decline in its ferrous scrap exports during Q1, 2018. Japan exported 1.76 MnT ferrous scrap during Q1’18 which have declined by 14% Y-o-Y as well as Q-o-Q as against 2.05 MnT ferrous scrap exports recorded in Q1 2017 and Q4 2017 respectively.

On monthly premises, ferrous scrap exports from Japan witnessed a fall of 20% M-o-M to 0.53 MnT in Mar’18 as against 0.66 MnT exports in Feb’18. In Mar’18 Japan’s ferrous scrap exports noted a plunge of 26% Y-o-Y as compared with 0.72 MnT exports in Mar’17.

Japan mainly exports special grade H2 scrap along with other preferred grades as SD, HS, Shindachi and H1. Major scrap export activities remain concentrated on ports like Tokyo, Osaka, Nagoya and Yokohama in Japan.

South Korea remained largest importer of Japanese ferrous scrap – 

During Q1 2018, Japan exported highest 1.07 MnT ferrous scrap to South Korea which is 61% of total exports. Although South Korean scrap imports have seen 8% Y-o-Y growth as against 0.99 MnT during Q 12017, its demand weakened sharply in Mar’18. Second largest buyer Vietnam imported 0.38 MnT occupying 22% share. Followed by other importers like China (0.23 MnT), Taiwan and Thailand.

In Mar’18, South Korean imports tumbled 23% M-o-M on weakened demand for rebar and high scrap inventories available with steelmakers. Vietnam and China imported 0.11 MnT and 0.07 MnT each witnessing M-o-M fall of 21% and 42% respectively as against corresponding imports in Feb’18.

Japanese scrap export prices rose sharply after mid Feb’18 – Amid increasing global scrap prices Japanese scrap prices turned upward after reaching short-term bottom in mid of Feb’18. Average H2 scrap export prices kept rising every next week from JPY 34,000/MT, FoB in mid of Feb’18 to JPY 37,000/MT which remained firm to higher side mostly for the month Mar’18. Following high scrap export offers, prices in Japan’s domestic market also increased sharply in Mar’18. High scrap prices also could have resulted in a sharp drop in exports from Japan in Mar’18.

During the first quarter of 2018, Japan’s crude steel production marginally improved as compared to crude steel production in Q1’17. As per statistics released by World Steel Association, Japan’s crude steel production recorded at 26.40 MnT during Q1’ 2018 as against 26.23 MnT during Jan-Mar’17.

Country-wise Japan ferrous scrap exports –

Quantity in MnT,
Source: SteelMint Stats