Ex-Japan scrap price falls further in new deals to South Korea

Friday, 14 February 2020 16:15:03 (GMT+3)   |   Istanbul
       

Despite some improvement in sentiments in the global scrap segment this week, weak demand and falling prices in the local Japanese market have led to a further decline in deal prices for ex-Japan scrap to South Korea. Japanese sellers have also been active in sales to Vietnam after the price drop announced late last week.

The latest deals for ex-Japan H2 scrap have been closed at JPY 22,000/mt ($200/mt) FOB, which is JPY 1,000/mt ($9/mt) below the previous transaction price level. Some sources have said that up to 40,000-50,000 mt have been sold recently. “We think that the actual volume is less than that. Many suppliers did not sell at such a low level,” a Singapore-based trader said.

Weak demand in the local Japanese market and the overall slack purchasing activity of Asian customers have led to such a price slump. This week, Tokyo Steel has cut scrap purchase prices by JPY 1,000/mt ($9/mt) to JPY 18,000-20,500/mt ($164-186/mt) delivered.

There have been a number of contracts concluded for ex-Japan H2 scrap to Vietnam at $250/mt CFR late last week and early this week. Following this development, prices for ex-US HMS I/II 80:20 have declined by $2.5/mt on average to $260-265/mt CFR Vietnam. But this level is mostly nominal, as no new deals and a lack of offers have been heard in the market this week, sources have said.

Some new offers from Japan to Vietnam have been heard at $260/mt CFR at the end of this week, indicating suppliers’ intention to increase prices in the near future.

This week, the Kansai Tetsugen export tender in Japan for the sale of 5,000 mt of Japanese H2 scrap has been closed at JPY 22,750/mt ($207/mt) FAS, which is JPY 2,900/mt ($26/mt) below the last month’s result, but stable compared to the level of Kanto Tetsugen tender closed earlier this week. This reflects the common opinion in the market that export prices have already reached the bottom.

$1= JPY 109.818


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