Japanese suppliers have cut their offer volumes to the export market to all major destinations by the end of this week, facing difficulties in finding vessels for current shipments and other transportation issues. Prices for scrap from Japan to all major outlets have posted a visible decline, SteelOrbis has learned.
The workable price level for ex-Japan H2 scrap in Vietnam has slipped to $430/mt CFR, down by $10-20/mt compared to the previous week, but no deals have been confirmed recently due to “very few firm offers in the market,” a trading source said. In addition to a lack of vessels for bulk shipments, freight costs have surged. At the moment, market sources estimate the freight from Japan to Vietnam at not less than $50/mt, compared to $30-35/mt earlier.
The latest booking for ex-Japan H1/2 50:50 by bulk to Taiwan has been reported at $410/mt CFR this week, with the freight being assessed by market sources at $30/mt minimum. The price is $25/mt below last week. Taiwanese customers also report “zero offers from Japan since Thursday,” according to one importer.
Japanese traders confirmed that most exporters have been focused on finding vessels for shipments that should be done in March and they are facing some delays, so they do not want to accept more commitments.
After some 20,000 mt of H2 scrap from Japan was bought by Dongkuk Steel in South Korea at JPY 41,000/mt ($376/mt) FOB as reported earlier this week, there have been no new bookings, sources have said.
Prices for imported scrap have also slipped in China as customers have been asking for just $470-475/mt CFR for ex-Japan HS scrap. The previous deals have been heard at $485/mt CFR and bids at $480-485/mt CFR. Sources said that, if Japanese sellers want to conclude a deal, they will have to give $475/mt CFR maximum for HS, which “does not seem very low for now,” one trader said. But no offers have been heard from Japan to China on Friday.
The SteelOrbis reference price for ex-Japan H2 scrap has been lowered further to JPY 41,000/mt ($376/mt) FOB, down by JPY 1,000/mt ($9/mt) on average from the level earlier this week.