Japan: Scrap export offers firm up on improving enquiries

Japanese scrap export offers continue to rise on active buying inquiries from domestic and overseas buyers. Market participants are showing interest in Japanese material; however, deals are happening in limited quantities.

Further, prominent buying countries like South Korea and Vietnam are ready to place bids for Japanese scrap. Amid tighter supplies due to lower scrap generation and as seaborne spot trading activities pick up, prices are likely to remain higher.

SteelMint’s assessment for Japanese H2 scrap export prices stands at JPY 48,000-49,000/t ($350-357/t) FOB, moving up by JPY 1,500-2,000/t ($11-15/t) w-o-w. Prices are now hovering at one month highs.

Additionally, prices continued to move up after the Kanto Tender concluded on 9^th December at increased levels.

Currently, the Japanese Yen is trading at 137.2 in the currency exchange market.

Buyers increase enquiries

• South Korea: Hyundai Steel has increased its bids for Japanese scrap by JPY 6,000/t ($44/t) for H2 and HS grades and by JPY 5,500/t ($40/t) against the last bid on 1 Dec’22. Bids for H2 scrap are at JPY 49,000/t ($356/t), while for HS the bid is at JPY 53,000/t ($385/t) FOB. After Kanto’s monthly export tender, Hyundai Steel raised its bids.

Considering that prices reached a short-term peak at the time, high purchases by steelmakers seem to have brought about a price increase.

• Vietnamese mill books US bulk cargo: Vietnam’s major Hoa Phat was heard to have bought a 30,000 t deep-sea cargo, comprising 15,000 t of HMS 1&2 (80:20), 10,000 t of shredded, and 5,000 t of PNS last weekend, at an average price of around $410/t on a CFR Vietnam basis. Mills have sourced material ahead of expectations of tight domestic supplies approaching the Tet holidays at the end of January.

Indicatives for Japanese H2 offers are at $370/t CFR levels.

• Bangladesh quiet: The imported scrap market remained less active due to the liquidity crunch and LC opening restrictions. Japanese H2 is currently trading at $420-425/t.Other prominent bulk scrap suppliers from the USA have been quoted at around $430-440/t CFR levels.

Tokyo Steel hikes scrap purchase prices: Japan’s major EAF steelmaker, Tokyo Steel, resumed a purchase price hike for the first time this week after cutting prices consecutively for more than one month.

The company reduced H2 grade bids by JPY 3,000/t ($22/t) for all plants, effective 14 December. H2 grades will be priced at JPY 49,000/t ($356/t) for deliveries to its Tahara, Kyushu, Okayama and Utsunomiya plants. Tokyo Steel increased its prices for the first time this week since 19 October.