Export prices for ex-Japan scrap in Asia have declined further this week, under pressure from cautious demand from major destinations and high competition in the region. Only occasional deals from Japan have been reported to South Korea and Taiwan this week, SteelOrbis has learned from the market.
Late this week, around 20,000 mt of ex-Japan H1/2 50:50 scrap have been traded to South Korean steelmaker Daehan at JPY 57,500/mt ($432/mt) CFR, which translates to JPY 57,000/mt ($428/mt) CFR for H2 benchmark grade. This price level is almost in line with that reported in deals to Hyundai Steel last week, taking into account freight, done at JPY 53,000/mt FOB. “Hyundai skipped the tender for Japanese scrap this week,” a seller source said. Overall demand for ex-Japan scrap in South Korea has been reduced, but for Japanese suppliers this destination is among a few still interested in purchases, even in low volumes.
The pressure on ex-Japan scrap prices in South Korea will continue in the coming week, given the sharp drops in ex-US scrap prices. The indicative level for ex-US bulk HMS I scrap to South Korea has been assessed at around $450/mt CFR, down by $30/mt from the workable level seen last week. This price level is based on the latest deal from the US to Vietnam and aggressive competition with the EU suppliers in the Asian region.
Also, a small booking has been reported for ex-Japan H1/2 scrap to Taiwan at $440/mt CFR, which translates to around JPY 52,500/mt ($394/mt) FOB for H2, according to SteelOrbis’ assessment.
To Vietnam, “some of the Japanese dealers made offers at $440/mt CFR, but the general offer price range is $450-460/mt CFR,” a source said. Even after a decrease by $20-30/mt over the past two weeks, deals to Vietnam have been very hard with the increased competition with European sellers, as one deal has already been signed at $420/mt CFR for HMS I/II and the last ex-US trade was at $460/mt CFR Vietnam.
As a result, the SteelOrbis reference price for ex-Japan H2 scrap has settled at JPY 52,500-53,500/mt ($394-402/mt) FOB, based on the latest deals and the most tradable levels. The higher end of the range has slipped by JPY 2,500/mt (or $17/mt given the exchange rate fluctuations), while the lower end is down by JPY 500/mt (or $3/mt over the week).