Asian domestic scrap prices have started to increase after a weeklong pause, which included a slight decline in some markets. Some Taiwanese mills were heard decreasing scrap purchase prices in the last week, while Japanese mills displayed mixed sentiments through their recent scrap auction period, which encountered some difficulty achieving target prices.
Scrap prices are now being heard increasing in tandem with Turkish import prices and a strong Chinese domestic market that has strengthened its pricing on finished steel goods to export markets.
H2 scrap from Japan for export has increased approximately $8/mt in the last week and is now heard at $236-240/mt FOB Tokyo Bay.
The most recent ex-Japan H2 deal for $262-263/mt CFR Vietnam or approximately $228-229/mt FOB Tokyo Bay in the week ended February 10 is now considered low and a few offers are heard at $270-275/mt CFR Vietnam today. Given the potential for additional increases by the end of the week, scrap dealers are limiting offers to the market.
As a result of mixed market dynamics, many regional Asian scrap dealers were heard divesting of large inventories in the past week and now find themselves short as the positive sentiment is increasing inquiries. Scrap purchase prices from collectors for feedstock in Japan have also increased $5-8/mt since last week.
Currently, offer prices from the US West coast for HMS I/II 80:20 are at $270-275/mt CFR South Korea and $250-255/mt CFR Taiwan. HMS I offers are at $275-280/mt CFR South Korea and $280-$285/mt CFR Vietnam. Compared to offers reported by SteelOrbis on Feb 8, HMS I offers to South Korea have increased by $10/mt. Compared to offers reported on Feb 10, HMS I/II offers to Taiwan have also increased by $10/mt.
According to sources, South Korean mills are comfortable with their scrap inventories and will most likely book deals for late March and April. Vietnamese mills are also looking to book for the same general delivery time frame but their bids for US export scrap at the moment are low at $265-$275/mt CFR Vietnam for HMS I. As the global strength continues along with increased domestic prices, bids are expected to increase for US origin scrap on the West coast.