Strong interest in prime grade scrap, both in the local Japanese market and in South Korea, has continued to push prices for ex-Japan material up further. That stands in contrast to the situation in the H2 grade segment, where the positions of Japan-based suppliers have been stymied by weak demand and, consequently, by lower bids from customers.
Accordingly, during the current week deals for ex-Japan shindachi grade scrap to South Korea have been concluded at prices JPY 1,000-1,500/mt ($9-14/mt) higher than in the previous week, at JPY 66,000/mt ($601/mt) FOB. Meanwhile, prices for ex-Japan HS and shredded scrap have risen also in contracts by JPY 1,500/mt ($14/mt) and JPY 2,000/mt ($18/mt) to JPY 62,000/mt ($564/mt) FOB and JPY 60,000/mt ($546/mt) FOB, respectively.
At the same time, though some deals for ex-Japan H2 scrap have also been done to S. Korea this week, prices have remained unchanged week on week at JPY 48,000/mt ($437/mt) FOB.
In the meantime, in China ex-Japan HS scrap offers have remained totally unattractive, with most bids voiced hardly at $520-530/mt CFR, around $70/mt lower than prices targeted by sellers.
Buying activity in the H2 grade segment has remained quite moderate, with most buyers aiming to purchase at lower prices, though sellers are not in a hurry to give substantial discounts. Specifically, recently the main local steel producer in Japan, Tokyo Steel, announced a H2 scrap purchase price decrease for two of its five assets by JPY 500/mt ($4.5/mt).
Meanwhile, in Vietnam, Japanese suppliers have continued to ask $490-500/mt CFR for H2 scrap, $10-15/mt higher than bids voiced by customers.
In its turn, ex-Japan offers of H1/2 50:50 scrap by bulk to Taiwan at $480/mt CFR, down $13-15/mt week on week, have failed to yield any results, with overall buying activity remaining collapsed there due to the spread of Covid-19.
As a result, the reference price for ex-Japan H2 scrap has decreased slightly to JPY 48,000-48,500/mt ($432-441/mt) FOB versus JPY 48,000-49,000/mt ($432-445/mt) FOB in the previous week.