Insufficient demand for H2 scrap has dragged down the prices in the monthly Kanto Tetsugen scrap export tender in Japan. At the same time, higher grade scrap prices from Japan are still going up as demand from S. Korea has remained strong.
Specifically, the monthly Kanto Tetsugen scrap export tender in Japan for 14,000 mt of H2 scrap was closed at JPY 47,888/mt ($436/mt) FAS, down JPY 1,888/mt ($11/mt) compared to the price fixed in last month’s auction. The cargo is allegedly destined to be shipped to Vietnam. The FAS price in the Kanto auction translates to JPY 48,888/mt ($444/mt) FOB.
While overall buying activity for ex-Japan H2 in Vietnam has remained constrained due to the outbreak of Covid-19 in the southern part of the country and most bids are hardly above $480-485/mt CFR, customers in Taiwan have continued to prefer HMS I/II 80:20 scrap from the US amid the greater attractiveness of prices.
On balance, the range of prices for ex-Japan H2 scrap has narrowed to JPY 48,000-49,000/mt ($432-445/mt) FOB, versus JPY 48,000-50,000/mt ($432-450/mt) FOB a week ago.
Meanwhile, in the prime grade scrap segment, on the contrary, Japanese scrap suppliers have continued to enjoy strong demand locally as well as in the nearest export destinations. Moreover, the sellers have again succeeded in booking at prices higher compared to the previous round of sales.
Accordingly, most recently, the major S. Korean mill Hyundai Steel has bid for ex-Japan H2 scrap and H1/2 50:50 at JPY 48,000/mt ($436/mt) FOB and JPY 48,500/mt ($441/mt) FOB, respectively, unchanged compared to the previous round of purchases. Meanwhile, prices for ex-Japan HS and shredded scrap have risen by JPY 4,500/mt ($41/mt) and JPY 3,000/mt ($27/mt) to JPY 60,500/mt ($550/mt) FOB and JPY 58,000/mt ($527/mt) FOB, respectively, in the recent bookings to the same steelmaking mill. The price level for ex-Japan shindachi grade scrap has increased by JPY 7,500/mt ($68/mt) to JPY 64,500/mt ($586/mt) FOB compared to the previous company’s bid.
Concurrently, another S. Korea-based steelmaker is said to have set its bids for ex-Japan shindachi grade scrap at JPY 64,500-65,000/mt ($586-591/mt) FOB, up JPY 1,000/mt ($9/mt) since the end of June.