During the past week, the downward pressure on Japanese higher grade scrap has increased due to higher supply and new deals have been reported at lower levels. But for H2 prices the decline has come to a halt, supported by healthy domestic demand.
Prices for shindachi scrap in at least one contract have declined to JPY 61,000/mt ($535/mt) FOB, down by JPY 2,500/mt ($22/mt) over the past week. Also, shredded scrap has changed hands in South Korea at JPY 53,000/mt ($465/mt), down by JPY 3,000/mt ($26/mt) compared to a bid Hyundai Steel made last week. In two weeks, prices for these grades have lost JPY 4,000/mt ($35/mt).
“With automobile companies like Toyota and Honda coming back and resuming their normal operational pace, shindachi generation is recovering,” a Japan-based source reported, adding, “Therefore, the Tokyo bay FAS price for shindachi scrap has moved down by JPY 500/mt ($4.38/mt), while the H2 price has inched up by JPY 500/mt ($4.38/mt) in the current week.” As a result, in the local Japanese scrap market, H2 scrap prices are at JPY 53,000-55,000/mt ($465-482/mt) FAS, the HS scrap is available at JPY 61,000-61,500/mt ($535-539/mt) FAS and shindachi scrap is at JPY 61,000-61,500/mt ($535-539/mt) FAS.
For H2 scrap, Japanese sellers have been choosing to sell even small lots in the local market, rather than cut prices further in the export market. The SteelOrbis reference price for export H2 scrap from Japan has remained at last week’s levels of JPY 49,500-51,000/mt ($434-447/mt) FOB.
Some Japanese suppliers have even been trying to announce higher offers for H2 and H1/2, but with no results yet. Offers for H1/2 to Taiwan have increased by $10/mt to $490/mt CFR.
$1 = JPY 114.02