Japan’s scrap export price driver, the monthly Kanto Tetsugen ferrous scrap export tender, for Dec’21 was conducted today. The lower bids from participants resulted in the tender remaining unconclusive for the second consecutive month in a row, SteelMint understands.
Source highlighted that the bid price was comparatively lower than the suppliers’ targeted price and prevailing domestic offers. It was around JPY 50,000/t FAS for H2 grade scrap. Bids have fallen following the decline in bids for Japanese scrap from Vietnamese, Bangladesh, and South Korean mills.
Last month, the average bid price stood at JPY 51,124/t ($453/t) FAS. However, the tender remained inconclusive with no deals closed as bids received were lower.
Market highlights
- South Korean mills bid in limited volumes for Japanese scrap: South Korean steel mills have been seen bidding in limited volumes for Japanese scrap. It has been cautious about booking higher volumes on the expectation that prices may fall, going ahead. Steel major Hyundai Steel has started booking Japanese scrap at very low volumes since last week. It recently signed a contract for Japanese scrap, as per SteelDaily reports. An industry official said, “Hyundai Steel has signed a contract for 10,000 t of Japanese steel scrap, which includes 5,000 t of H2 grade scrap.”
On 2 Dec’21, the South Korean steel major trimmed bids for Japanese ferrous scrap by JPY 2,000-3,500/t ($18-31/t) for various grades compared to the last bid on 17 Nov’21. Bids are now at JPY 47,500 ($420/t) FOB Japan for H2 grade, lower by JPY 2,000/t.
- Limited bids from Vietnam: Vietnam’s imported scrap market has remained largely quiet for yet another week with prices remaining mainly range-bound. The prices for bulk Japanese H2 remained stable at $490-495/t CFR levels.
- Bangladesh market quiet after active bookings in end-Nov: Bangladesh mills had actively restocked bulk cargoes from other supplying countries like the European Union, Australia and USA during the last week of Nov’21, owing to the disparity in Japanese offers. A major mill booked around 15,000 t of bulk Japanese H2 at $562-563/t CFR Chittagong basis, last week. Fresh indicative offers for H2 grade are being reported at $555-560/t CFR Chittagong levels, down by $10-15/t w-o-w.
Japan’s Tokyo Steel trims scrap procurement prices: Tokyo Steel has lowered scrap purchase bids for two steelworks after a gap of three weeks. H2 grade scrap prices have corrected by JPY 500/t ($4/t). Post-revision, the company’s price for H2 scrap stands at JPY 54,500/t ($480/t) for the Tahara and Utsunomiya works. However, the price for new press A grade stands at JPY 58,500/t ($515/t), down 2,500/t ($22/t) against the last revision.
Tokyo Steel scrap purchase price effective from 10th Dec’21
Source: Tokyo Steel
Prices in JPY
Outlook
Japanese domestic scrap prices may fall further on declining export offers. However, it has been pointed out that the number of dismantling projects is increasing at present, and the amount of scrap generated is rising.
As per reports, Toyota Motor Corp, the world’s top-selling automaker, said earlier this month that it will start making up for production losses incurred in the last seven months due to chip shortages in Dec’21 with its factories in Japan returning to normalcy. This is likely to boost domestic scrap supplies in Japan.
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