Japan: Sluggish scrap market keeps major buyers away

Japan’s scrap market turned sluggish and uncertain this week due to bearish trading activities. As a result, major regions preferred to stay away from buying scrap. Japanese suppliers are likely to keep their offers high as the sharp devaluation in the Japanese currency (Yen) may support the export market, SteelMint noted.

On the other hand, Japan’s domestic scrap prices rebounded this week after three cuts in the purchase prices by Tokyo Steel in the last one month.

Japanese scrap market updates

• Tokyo Steel on the sidelines: Due to the slow international market, there is a strong sense of waiting despite prices increasing marginally during the start of the week. Tokyo Steel raised bid prices for H2 scrap by JPY 500/t ($3/t) for all of its plants, effective 19 October. Post-revision, prices of H2 scrap stand at JPY 49,000/t ($329/t) were delivered to the Tahara plant and at JPY 50,000/t ($336/t) to the Utsunomiya plant.

Earlier on 12 October, 10,000 t were won at an average bid price of JPY 49,865/t (H2 FAS) in the Kanto Cheorwon Cooperative Tender, surpassing transaction prices in the Tokyo Bay area. The highest price bid was JPY 50,000/t.

• Local buyers in wait-and-watch mode: Steelmakers have cut their scrap purchases as availability of H2 grade scrap is tight amid lack of demolition. However, the production volumes remained firm. H2 is purchased from yards at a price between JPY 36,500/t and JPY 37,500/t. It is clear that they are waiting for a clearer scrap price direction.
• Condition unchanged in Nagoya: The winning bid price formed in the joint export bid of the Kanto Cheorwon Cooperative Tender was higher than the average price for the area. The cost to buy H2 from yards remained stable at JPY 34,500/t to JPY 35,500/t.

Toyota’s production remained quite low. Special steel electric furnace manufacturers lowered their production followed by little demand for Shindachi scrap. The supply-demand balance remained fragile for H2 scrap. However, shipping of materials for electric furnaces is stable as construction demand increases.

Note: This article has been published in accordance with an article exchange agreement between SteelDaily and SteelMint.