Japan’s ferrous scrap exports totalled 0.44 million tonnes (mnt) in January 2024, marking a 24% decrease from the 0.58 mnt reported in December. Similarly, compared to January 2023’s figure of 0.56 mnt, exports fell by 21% on an annualised basis.
Japan’s H2 scrap export offer: Japan’s average monthly H2 scrap export offers stood at JPY 52,500/t ($353/t) in January, up by JPY 1,300/t ($9/t) against JPY 51,200/t ($345/t) in December 2023.
Country-wise exports
South Korea: South Korea witnessed a 7% decline in scrap imports in January, with volumes dropping to 0.13 mnt from 0.14 mnt in the previous month. Y-o-y, a substantial decrease of 57% was recorded in imported volumes from Japan compared to January 2023’s figure of 0.3 mnt. This decline in scrap imports can be attributed to domestic mills’ preference for procuring largely from the domestic market, where prices are lower than imported scrap offers. Additionally, some mills had maintenance plans in place and maintained sufficient inventories during the period under review.
Vietnam: In January, a significant portion of Japanese scrap exports was directed to Vietnam, albeit with a 9% decrease in volumes compared to December. Vietnamese mills imported 0.21 mnt of scrap, down from 0.23 mnt in December. However, in a y-o-y comparison, imports surged by a remarkable 62%, rising from 0.13 mnt in January 2023. The decline in imports can be attributed to disparities between bid and offer prices, reduced demand from downstream sectors, and the impact of the Lunar New Year holidays.
Taiwan: Scrap imports by Taiwanese mills dropped by almost half to 0.04 mnt in January 2024 from 0.08 mnt in the previous month. However, compared to January 2023, imports saw a significant 33% increase from 0.03 mnt. The decrease in imports can be attributed to reduced buying interest from Taiwanese mills due to sufficient stock availability, competitive offers from the US, and the occurrence of the Lunar New Year holidays in the latter half of January.
Semi-finished exports: Japan’s steel billet exports dipped by 3% m-o-m in January to 229,071 t from 236,845 t in December 2023, as per data recently released by Customs. However, exports inched up by 1% y-o-y compared to 225,951 t in January 2023. South Korea was the major importer with 100,474 t followed by Taiwan with 61,546 t.
Outlook
In the near term, Japan’s ferrous scrap exports are anticipated to encounter pressure, mainly due to the absence of demand from Korea, which is opting for cost-effective alternatives domestically. However, Taiwan and Vietnam might seek to replenish their stocks post-Lunar New Year holidays, potentially leading to some shipments from Japan to these destinations.