Japan: Weak Vietnam, Bangladesh demand drags scrap exports; Kanto prices extend decline

• Lower dollar prices offset currency depreciation benefits
• Kanto scrap prices decline on weak exports

Japan’s ferrous scrap export market remained under pressure during the week as sluggish demand from key buyers Vietnam and Bangladesh continued to weigh on export negotiations. Seasonal rains, weak downstream steel demand, and buyers’ resistance to higher prices limited fresh transactions, resulting in softer export values and increasing pressure on the domestic scrap market.

H2 export negotiations were heard at around JPY 50,500/t ($309/t) FOB for both Vietnam and Bangladesh, below the JPY 51,000-51,500/t ($312-315/t) FOB levels reported for South Korea. Although the weaker Japanese yen improved export competitiveness, declining dollar-denominated scrap prices offset most of the currency advantage, limiting sellers’ ability to secure higher offers.

Market participants said Vietnamese buyers maintained bids around $355-360/t CFR, while Bangladesh buyers targeted around $373-375/t CFR, reflecting cautious procurement amid weak finished steel demand and seasonal disruptions. As a result, fresh export bookings remained limited.

The slowdown in exports to Vietnam and Bangladesh, Japan’s two largest scrap destinations, also pressured the domestic market. Export activity through the Kanto Tekkogen Cooperative has been largely concentrated on these two markets, making domestic prices increasingly vulnerable to weaker overseas demand.

The impact became more visible after the cooperative’s July export tender settled at JPY 52,508/t ($321/t) FAS, nearly JPY 2,000/t ($12/t) lower than the previous month. Soon after the tender, Tokyo Steel lowered its scrap purchase prices, with other electric arc furnace (EAF) mills following suit.

Market participants said weak rebar demand, reduced EAF production, and comfortable scrap inventories have further loosened supply-demand fundamentals in the Kanto region. With export negotiations remaining sluggish and Gulf-area prices falling below domestic mill buying prices, sentiment is expected to remain bearish in the near term unless overseas demand improves.

Note: This article has been published in accordance with a content exchange agreement between Japan Metal Daily and BigMint.