Japanese scrap exporters have started to increase prices this week and have stopped reacting to low bids from S. Korea. Demand from other countries like Vietnam and Taiwan have supported the upturn. At the same time, the main Japanese EAF-based producer Tokyo Steel has announced its second local purchase prices increase this week, also reflecting the increasingly bullish mood.
The SteelOrbis reference price for Japanese H2 scrap has increased to JPY 27,500-28,500/mt ($263-272/mt) FOB, up by JPY 1,000/mt ($9.6/mt) on average from last week. Most offers have been at JPY 28,500/mt ($272/mt) FOB and above with only limited discounts possible, according to sources from Japan.
For instance, offers of H2 for Vietnamese customers have increased to $305-308/mt CFR recently, while the latest deals have been heard at $300/mt CFR and slightly above, versus $295-300/mt CFR earlier.
In Taiwan, Japanese suppliers have been asking $300/mt CFR for H1/2 50:50 by bulk, while deals were at $288-290/mt CFR last week.
South Korean customers have been inactive in the import market after the recent decline in local scrap prices, but, with the current increase in offers from Japan, they will have to pay a minimum of JPY 27,000-27,500/mt FOB to attract any volume, sources have said.
On October 22, Japanese producer Tokyo Steel increased its scrap purchase prices for two assets by JPY 1,000/mt ($9.6/mt). The scrap price for H2 at the Okayama factory has risen to JPY 27,000/mt, while in Takamatsu it has reached JPY 26,000/mt, delivered. On October 20, Tokyo Steel had hiked prices for the same two factories by JPY 500/mt ($4.7/mt). Prices for the other three assets have remained stable at JPY 26,000-27,000/mt delivered.