Japanese ferrous scrap export offers fall further; buyers wait for Kanto tender

• Bulk H2 scrap offers for Vietnam drop to 13-month low
• Tokyo Steel scrap purchase prices fall to 9-month low
• Kanto scrap export tender scheduled for 12 July

Japanese scrap export trades remained subdued on lower bids from overseas buyers. Prominent buyers like Vietnam and South Korea are mostly quiet over the last few weeks. However, some Vietnamese mills are showing interest since they haven’t bought much for July and August shipments. But suppliers are asking for high prices and are not in a hurry to sell material.

Overseas buyers await the Kanto scrap export tender outcome for clear price directions.

SteelMint’s assessment for Japanese H2 scrap export prices stands at JPY 47,500/t ($350/t) FOB, down by JPY 1,000 ($7/t) w-o-w.

Following the export price downtrend, Japan’s Tokyo Steel has adjusted domestic scrap purchase prices.

Buyers’ market overview

• Vietnamese buyers bid lower for Japanese material: A prominent buyer like Vietnam remained inactive in booking Japanese material over the last few weeks. Buyers are focusing on domestic material due to cost competitiveness and prompt availability. Offers for Japanese bulk H2 scrap are at $390-400/t CFR, down by $10/t w-o-w. Slow domestic demand for semi-finished and finished steel kept imported scrap trades slow.
• South Korean mills to cut domestic scrap purchase prices up to $20/t: South Korean steel majors, Hyundai Steel and Dongkuk Steel, have lowered domestic scrap prices for all grades twice this week by up to KRW 25,000/t ($20), as per Steel Daily. Hyundai Steel will trim prices for Pohang, Incheon and Dangjin steelworks while Dongkuk Steel will reduce prices for Incheon and Pohang.

In contrast, mills desisted from bidding for Japanese scrap for yet another week and actively traded in domestic material.

• Tokyo Steel cuts scrap purchase prices twice this week: Tokyo Steel, Japan’s largest EAF steelmaker, has lowered scrap purchase prices by up to JPY 2,000/t ($15/t). After the second revision, bid prices for H2 scrap were at JPY 51,000/t ($/t) delivered to Tahara, while prices for Utsunomiya remained unchanged at JPY 50,000($368/t), delivered via land route. Currency depreciation and falling export prices weighed on Japanese scrap prices. Interestingly, prices have fallen to a nine-month low for H2 grade at the Utsunomiya works.

Outlook

Japan’s monthly Kanto Tetsugen ferrous scrap export tender has been scheduled for 12 July, 2022, sources informed SteelMint. The average bid for the June tender fell considerably by JPY 13,450/t ($100/t) compared to bids in the last tender held in April. The tender for May was not concluded owing to lower bids from participants. Market participants are looking forward to the July tender for price outlook.