Ex-Japan scrap prices drop as suppliers want to accelerate sales

Friday, 25 September 2020 16:25:06 (GMT+3)   |   Istanbul
       

Slack demand for Japanese scrap in the international market over the past few weeks has put pressure on prices and suppliers have become more aggressive, trying to accelerate trading. Some deals at around $10/mt lower have been reported this week, but contract prices for some higher grades of Japanese scrap have remained stable.

The tradable price level for Japanese H2 scrap has dropped by JPY 1,000-1,500/mt ($9.5-14/mt) over the past week to JPY 27,000-28,000/mt ($256-265/mt) FOB, according to SteelOrbis. The lower end of the range corresponds to the recent bid from Hyundai Steel, while the higher end of the range reflects the latest deal in Vietnam. Suppliers have been trying to hold prices, but buyers’ positions have been stronger and the price reduction was necessary to return sales, according to a number of market participants.

A deal for H2 scrap has been done at $295/mt CFR Southern Vietnam, against a $305/mt CFR contract reported last week. “This is $15/mt lower than the one two weeks ago when prices were at a peak,” a trader commented.

In South Korea, late this week Hyundai Steel has managed to buy around 60,000-70,000 mt of Japanese scrap, including shindachi, shredded and HS scrap, but no new contracts have been reported for H2. Deals for shindachi (equivalent to high grade ex-US busheling scrap) and HS have been done at JPY 31,000/mt ($294/mt) FOB, accounting for the most purchased volume. Shredded scrap has been sold at JPY 30,500/mt ($289/mt) FOB. The producer has been bidding for more than 150,000 mt of Japanese scrap this time, much higher than usual. But low demand for H2 scrap in South Korea may remain in the next one to two months.


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