This week, Japan saw a slight uptick in its H2 scrap export offers, attributed to the weakening of the Japanese yen against the US dollar. However, this decline in value, when measured in dollar terms, facilitated a few transactions to Vietnam and Taiwan.
According to BigMint’s recent assessment, Japanese H2 scrap export offers now stand at JPY 51,700/tonne ($337/t) FOB Tokyo Bay, reflecting an increase of JPY 300/t ($2/t) compared to the previous week’s JPY 51,400/t ($335/t) FOB.
As per market sources, “The Japanese market is currently sluggish, but there is hope for an upturn during the summer period. Nonetheless, it is expected that suppliers will continue to export Japanese scrap due to the persistently weak exchange rate.”
Updates of other markets
Vietnam: In Vietnam, there were reports of downstream domestic scrap demand being bolstered by efforts to replenish inventory levels ahead of the holidays this week. Meanwhile, buyers observed that as imported scrap prices increased, mills persisted in using domestic scrap to mitigate material costs, despite limited local supply.
Offers for H2 scrap varied between $378-385/t CFR Vietnam, with bids ranging from $368-373/t CFR and below. A northern Vietnamese mill tendered $375/t CFR Vietnam for H2 scrap, specifying a requirement for “special” quality from a particular supplier.
Offers for US-origin HMS (80:20) were assessed at $385/t CFR, while buyers bids were heard below $380/t CFR.
South Korea: South Korean mills persisted in their lack of enthusiasm for acquiring imported scrap owing to the sluggish downstream demand. Additionally, reports indicated that some mills were operating at only 50% capacity, with a few contemplating further cuts beyond the 50% mark in the coming months if demand for rebars failed to improve, all in an effort to sustain margins.
This week, the iron scrap inventory held by eight major Korean steel mills was reported at 856,000 t, marking a decrease of 16,000 t compared to the previous week.
Taiwan: Feng Hsin Steel, Taiwan’s largest rebar producer headquartered in Taichung in central Taiwan, has decided to hold its rebar list prices and procurement prices for local scrap again over 29 April-3 May to monitor market developments this week, a company official confirmed on Monday.
As a result, for business discussions till this Friday, the mini-mills 13mm dia rebar stays at TWD 19,700/t ($604/t) exw, unchanged since mid-April, and its buying price for local HMS (80:20) scrap keeps stable on week at TWD 11,100/t, according to the official. Global scrap prices delivered to Taiwan have diverged over the past week, with the price of US-sourced HMS (80:20) scrap staying the same on week at $363/t CFR Taiwan as of 29 April, while the price of Japan-origin H2 scrap has continued softening to land at $361/t CFR Taiwan as of Monday, down for the third week by another $4/t from the previous week, according to a local market source.
Outlook
In the near term, market activities are expected to remain sluggish due to mid-week holidays for Labour Day and Golden Week. However, following the holidays, exports from Japan are anticipated to pick up if the JPY continues to depreciate against the USD, rendering offers more attractive to importers.