Ex-Japan scrap prices under pressure, though sharp currency drop gives support

Friday, 20 March 2020 17:15:50 (GMT+3)   |   Istanbul
       

Prices for Japanese H2 scrap have been relatively stable in JPY and declined on US dollar basis compared to last week; however, bearish sentiments have persisted. Overall demand from overseas has been moderate.

Offers from major Japanese sellers for H2 scrap are still at JPY 22,000-22,500/mt ($199-203/mt) FOB. “The suppliers were not aggressive to sell at the Hyundai bid price [JPY 22,000/mt FOB] early in the week, but they rushed to sell at that level today,” an Asian trader said. According to one source, some exporters can already give JPY 21,500/mt ($194/mt) FOB in negotiations to South Korea, which corresponds to JPY 24,000/mt ($217/mt) CFR.

While on Monday, March 16, the exchange rate was $1 = JPY 105.779, on Friday it dropped to 110.617. As a result, suppliers have been able to decrease prices in dollars by up to $9/mt without losing profitability.

In Vietnam, prices for ex-Japan H2 have lost $5/mt over the past week, coming to $240-245/mt CFR. A deal for H2 has been concluded at $245/mt CFR Vietnam, while the latest contracts for shindachi scrap have been at $265-270/mt CFR. “Demand is sluggish, but mills who need to buy are importing at low prices,” a source said.

Nominal prices for HMS I/II 80:20 have lost $10/mt from last week to $255-260/mt CFR Vietnam.  


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