Japanese scrap suppliers have continued to push up their export prices, benefiting from further hikes in prices locally and firm local demand. However, higher prices for ex-Japan scrap have been accepted by a few customers, while the majority of buyers have remained cautious as regards purchases as prices have increased too rapidly.
Following an increase in local scrap prices in Japan this week, Japanese exporters have been insisting on higher prices, but deals are rare. As SteelOrbis reported earlier, this week South Korean mill SeAH booked ex-Japan shredded scrap at JPY 62,500/mt ($561/mt) CFR, up JPY 2,000/mt ($18/mt) compared to a contract last week. Considering a freight rate at around JPY 4,000/mt, the FOB price is estimated to be at JPY 58,500/mt ($525/mt) FOB.
A rumor of a sale of Japanese H2 grade scrap to South Korea at JPY 52,000/mt ($467/mt) FOB has been heard, but there has been no confirmation by the time of publication. By the end of the week, one mill from South Korea has decided to buy two lots of ex-Japan H1/H2 50:50 at JPY 56,900/mt ($510/mt) CFR, up by JPY 700/mt ($6/mt) over the past week. This price translates to JPY 52,900/mt ($474/mt) FOB. As a result, market sources believe that the tradable level for ex-Japan H2 to South Korea should be at JPY 52,400-52,500/mt ($470-471/mt) FOB or so.
Meanwhile, H2 offers to Vietnam are said to have reached even higher levels, reportedly at $530/mt CFR, $30/mt higher compared to the prices fixed in rare bookings a week ago. With the assumed freight rate at $50/mt from Japan to Vietnam, the FOB price is assessed at $480/mt FOB.
On balance, Japan-based suppliers are unlikely to accept prices lower than JPY 52,500-53,500/mt FOB in new orders for H2, taking into account that these numbers have already been fixed in recent transactions domestically. This is a JPY 500-2,500/mt increase to the reference price level a week ago.
Meanwhile, as SteelOrbis reported earlier this week, local purchase H2 scrap prices have been settled in the range of JPY 51,000-53,000/mt ($457-475/mt), increasing over the past week by JPY 1,000-2,000/mt ($9-18/mt). Shinadachi scrap prices have followed the same pattern, reaching JPY 53,500-59,000/mt ($480-530/mt) this week.