South Korean mills were heard finalizing trades for Japanese H2 scrap at JPY 24,000-24,500/mt ($212-216/mt) FOB Tokyo Bay from late in the week ended May 12 to early this week. These deals were completed while scrap purchase prices decreased on uncertainty in the market, driven by the sudden presence of Chinese scrap offerings and its unknown effect.
Depending on region, some Japanese mill scrap purchase prices have been heard trending sideways while others have been heard increasing prices slightly to increase May feedstock. Domestic mills are heard purchasing H2 scrap at JPY 23,000-23,500/mt ($207-212/mt) delivered to the mill.
In turn, the domestic price trend has allowed export scrap to rebound by JPY 1,000-2,000 to approximately JPY 24,000/mt ($216/mt) FAS from the JPY 22,000-23,000/mt ($193-201/mt) FAS reported by SteelOrbis on May 10. In dollar terms due to a stronger yen, prices increased $15-23/mt. The updated FAS price translates to approximately JPY 25,000-25,400/mt ($225-229/mt) FOB Tokyo Bay.
A source noted that Japanese export offers of H2 containerized scrap have been heard recently at $240-245/mt CFR Taiwan and $250-255/mt CFR Vietnam which translate to approximately JPY 24,000-24,700/mt ($216-223/mt) FOB Tokyo Bay. In FOB terms, the offer prices decreased $9-16/mt from the average offer of JPY 26,250/mt ($232/mt) on H2 reported the week ended May 12.
Soft bids from buyers are heard targeting $230-235/mt CFR Taiwan and CFR South Korea and $240-242/mt CFR Vietnam levels which translate to approximately JPY 23,000-23,400/mt ($207-211/mt) FOB Tokyo Bay, a lower price point than the latest South Korean transactions. Given the increasing costs to obtain domestic scrap for export, sources say these price levels should soon be pushed up above the average level of JPY 25,200/mt ($227/mt) FOB Tokyo Bay. However, Chinese scrap remains the wild card within H2 export pricing and the ability of H2 traders to resist the lower offers and begin to increase export deal prices.
$1=JPY 114.27, 5/10/2017
$1=JPY 113.35, 5/12/2017
$1=JPY 110.95, 5/17/2017