- Softer collection prices weigh on Japanese export sentiment
- Price gap between billet, bulk scrap shrinks to $100-120/t in Vietnam
Japan’s H2 ferrous scrap export market remained under pressure in the week ended 3 August due to competitive export offers, Tokyo Steel’s domestic price cuts, and cautious Vietnamese buying, with the recent southern Japan earthquake having minimal impact on export logistics.
Weekly assessments
- Japanese H2 scrap was at $360/t CFR Vietnam, down by $1/t w-o-w.
- Japanese H2 scrap was at JPY 50,600/t ($323/t) FOB Tokyo Bay, down by JPY 200/t ($1/t) w-o-w.
- US-origin HMS 80:20 bulk stood at $372/t CFR Vietnam, down by $1/t w-o-w.
Japan
Japan’s H2 ferrous scrap export market remained under pressure during the week as weak Vietnamese buying interest, repeated domestic price cuts by Tokyo Steel, and softer collection prices continued to weigh on export sentiment. Export offers were heard at $363-365/t CFR Vietnam, while buyer bids remained around $355/t CFR, with tradable values largely reported at $360/t CFR, while FOB Tokyo Bay H2 declined to JPY 50,600/t ($323/t), down JPY 200/t ($1/t) w-o-w.
Tokyo Steel announced its 11th price cut since late May, reducing H2 purchase prices by another JPY 500/t ($3/t) across most plants, bringing buying prices to JPY 50,500-53,000/t ($323-339/t). Domestic H2 collection prices also weakened to around JPY 49,300/t ($315/t) FAS, reflecting softer domestic demand.
A market participant commented, “The southern Japan earthquake caused only limited disruption, with minor berth damage in Kumamoto and little impact on overall scrap export availability.”
Vietnam
Vietnamese mills remained active in monitoring the market but continued buying mainly on a need basis. Buyers increasingly favoured imported billets and domestic scrap, as the price gap between billet and bulk scrap narrowed to around $100-120/t. Domestic scrap procurement strengthened after Shengli raised its H2 purchase price by VND 200/kg ($8/t) to VND 9,700/kg ($369/t) DDP, supported by weather-related supply constraints. Imported Indonesian billet deals were heard at around $476-480/t CFR, while domestic rebar prices increased by about VND 50-100/kg ($2-4/t) to VND 14,500/kg ($552/t) exw, indicating a modest improvement in finished steel demand.
The deep-sea scrap market remained subdued, with US-origin HMS 80:20 offered at $380/t CFR Vietnam against tradable levels near $370/t CFR, while containerised demand was firmer, with mills targeting US HMS 80:20 above $330/t CFR and Japan H2 around $355/t CFR. Meanwhile, Shengli raised its H2 purchase price by $8/t to $369/t DDP.
Outlook
H2 export market is expected to remain under mild pressure next week as Tokyo Steel’s price cuts and cautious Vietnamese buying weigh on sentiment, though improving steel demand and billet activity may offer limited support.
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