Japan: H2 ferrous scrap export prices fall for 3rd week; Vietnamese buying stays subdued

• Vietnamese buyers favour containerised cargoes amid weak steel demand
• Domestic demand in Japan also slows due to summer maintenance at EAF mills

Japan’s H2 ferrous scrap export market remained under pressure during the assessment week ended 27 July as subdued demand from Vietnam, rising freight costs, and seasonal weakness continued to weigh on prices. Weak domestic consumption during summer maintenance outages at electric arc furnace (EAF) mills, coupled with cautious overseas buying, kept export sentiment bearish.

A weaker Japanese yen improved exporters’ competitiveness, but buying remained limited as Southeast Asian mills maintained sufficient inventories. Meanwhile, the deep-sea bulk scrap market stayed under pressure amid weak finished steel demand.

Weekly assessments

• Japanese H2 scrap was at $361/t CFR Vietnam, down by $2/t w-o-w.
• Japanese H2 scrap was at JPY 50,800/t ($311/t) FOB Tokyo Bay, down by JPY 1,450/t ($9/t) w-o-w.
• US-origin HMS 80:20 bulk stood at $373/t CFR Vietnam, stable w-o-w.

Japan 

H2 ferrous scrap export prices declined for the third consecutive week as Vietnamese buyers remained on the sidelines after securing sufficient inventories for September shipments. Export offers were heard at $362-364/t CFR Vietnam, while workable levels were estimated at $360-362/t CFR. Although a transaction was at $362/t CFR during the previous week, no fresh spot deals were concluded during the current week.

Market participants said trading with Vietnam remained subdued due to a persistent $10/t bid-offer gap. Sellers maintained H2 offers at JPY 52,500-53,500/t ($321-327/t) FOB Japan (around $370-373/t CFR Vietnam), while cautious buying and weak finished steel demand continued to limit fresh bookings.

Domestic sentiment remained weak as Tokyo Steel cut scrap purchase prices twice during the week, while summer maintenance at several EAF mills reduced scrap consumption. H2 collection prices softened to JPY 51,000-51,500/t ($312-315/t) FAS, with FOB Tokyo Bay H2 assessed at JPY 50,800/t ($311/t), down JPY 1,450/t ($9/t) w-o-w amid weaker export demand and subdued domestic buying.

Vietnam 

Vietnamese mills continued to purchase only on a need basis as weak finished steel demand and the rainy season constrained construction activity. Many mills reported having adequate inventories, reducing the urgency for additional imports.

Containerised scrap attracted relatively stronger interest than bulk cargoes as the widening price gap improved its competitiveness. The deep-sea bulk market remained subdued, with US-origin HMS 80:20 offers heard at $375-380/t CFR Vietnam while tradable values were around $370/t CFR. Rising freight costs failed to stimulate buying interest, and market participants said mills remained reluctant to commit to large-volume cargoes amid uncertain downstream demand.

Outlook

BigMint expects Japan’s H2 export market to remain under pressure in the coming week as weak Vietnamese steel demand, seasonal maintenance outages, and cautious mill procurement continue to limit buying activity. Deep-sea bulk scrap prices are also likely to remain soft until regional construction activity improves and finished steel demand recovers across Southeast Asia.