Japanese scrap export offers firm w-o-w, trade muted

The Japanese scrap export market was mostly quiet this week with no major deals being heard due to limited enquiries and weak demand in the domestic as well as overseas markets.

Export offers were largely stable w-o-w. Major South Korean mills have postponed their bids for Japanese material for yet another week. Hence, prices are expected to drop further.

SteelMint’s assessment for Japanese H2 scrap export prices stands at JPY 43,000-44,000/t ($307-314/t) FOB, unchanged w-o-w. Prices have hit the lowest level in three months.

Japan’s Oct crude steel output falls 11% y-o-y

Japan’s crude steel output in October fell by 10.6% on year to 7.35 million tonnes (mnt), according to latest data by the Japan Iron and Steel Federation (JISF). This is the 10th straight monthly y-o-y dip. Japanese industry insiders have been saying that steel demand for public infrastructure and civil engineering is firm, but this is not being reflected in the data.

Buyers maintain silence

• South Korean mills postpone bids for Japanese scrap: Major steel mills have postponed their scrap bookings considering the bearish finished steel sentiments. Furthermore, steel mills will reduce their scrap buy prices by up to KRW 40,000/t ($30/t) this week. Hyundai Steel (for Incheon and Dangjin works), Dongkuk Steel (Incheon works), Hwan Steel, Daehan Steel, and YK Steel will cut prices.

South Korea’s major steelmakers had 1.01 mnt of scrap in hand as on 21 November, 2022, an increase of 12,000 t from the previous week, as per a SteelDaily report. The southern region’s steelmaker reported 415,000 t of scrap stock, a decrease of 7,000 t over the previous week. The central region’s steel producers reduced prices by KRW 50,000/t in only one week, while the southern region’s steel producers slashed prices by KRW 60,000/t.

• Bangladesh buyers quiet on LC issues: Bangladesh’s imported scrap market was mostly silent. Major mills are showing some interest in bulk USA material owing to cost competitiveness, but due to LC issues, buyers are mostly quiet.  However, indications for USA bulk HMS and Japanese H2 are now at the same levels of $370-375/t CFR Chittagong.

Tokyo Steel reduces scrap buy prices by $4/t

Japan’s major EAF steelmaker, Tokyo Steel, has reduced scrap purchase prices for the first time this week. The company reduced H2 grade bids by JPY 500/t ($4/t) for all its plants, effective 25 November. Post-revision, prices of H2 scrap stand at JPY 46,500/t ($335/t) delivered to the Tahara works and Okayama plant followed by JPY 47,000/t ($339/t) to the Utsunomiya plant.