Japanese scrap traders have been shifting their attention to quality control in the past six months because of recent domestic waste management regulations as well as customer demands. As a result, the cost of managing and exporting steel scrap has risen for domestic sellers, exporters and trading houses.
In April 2018, Japanese waste management regulators increased guidelines on the management of steel scrap and non-ferrous materials to minimize accidental fires at both yards and steel mills.
Additionally, in line with recent Chinese actions to control the quality of ferrous scrap imports, buyers from countries such as South Korea, Vietnam and neighboring markets are requiring guarantees on grade qualities to diminish the presence of miscellaneous scrap iron in scrap purchases on both environmental and safety objectives. Already several large export buyers have reportedly diminished their purchases of H2 scrap due to its higher presence of miscellaneous scrap. For example, Hyundai Steel in South Korea has diminished its purchase of H2 scrap in 2018 and instead sought volumes of higher scrap grades.