Customers for ex-Japan scrap forced to raise bids to obtain needed volumes

Amid the continued imbalance of demand and supply, customers for ex-Japan scrap have continued to struggle to obtain their required amounts of feedstock, increasing their bids practically every day. The situation has recently been aggravated, following the solution adopted by major Japanese automaker Toyota to cut its November production by as much as 15 percent as the pandemic and the global semiconductor shortage have significantly affected their performance. With regard to scrap, this appear likely to mean another decrease in generation.

Accordingly, the main EAF-based steel producer in Japan, Tokyo Steel, has revised its scrap purchase prices for the fourth time during the current week, today, October 22, raising its prices for H2 and for shindachi scrap for its Tahara plant by JPY 500/mt (around $4.5/mt) compared to the previous levels. Consequently, the new levels for H2 scrap have been settled at JPY 52,000-59,000/mt ($456-518/mt), while the company’s purchase prices for shindachi scrap have reached JPY 54,500-65,000/mt ($478-571/mt). The lower end is valid for the Takamatsu plant, while the highest end is for the Tahara plant. All prices are delivered and effective from October 23.

Although the rate of increase of export prices has lagged behind local prices, the levels are quite comfortable for Japanese scrap suppliers to book some volumes. As SteelOrbis reported earlier, following the transactions of ex-Japan scrap to South Korea at PY 52,000/mt ($456/mt) FOB, the South Korean steelmaker has increased its bid to JPY 54,500/mt ($478/mt) FOB.

Meanwhile, offers of ex-Japan H2 scrap to Vietnam have increased by $15-20/mt within the past week to $550-570/mt CFR. Although the levels have not been fixed in deals yet, bids from Vietnamese customers are gradually increasing. In particular, this week they have been ready to book ex-Japan H2 scrap at $535-540/mt CFR, which means a $10-15/mt increase within the past week.

Consequently, the SteelOrbis reference price for H2 has been increased to JPY 54,000-55,000/mt ($472-483/mt) FOB this week, compared to JPY 52,000-54,000/mt ($455-473/mt) FOB a week ago.