Solid demand for scrap and, consequently, rising bids from local steelmakers have continued to strongly support Japanese scrap suppliers this week. In addition, Japanese exporters have continued to enjoy gains in deals to Vietnamese customers, with latter accepting higher prices due to the accelerating demand for steel billet in China. Meanwhile, import activity in South Korea has remained mainly muted due to the national holidays.
Specifically, while at the beginning of the current week ex-Japan H2 scrap to Vietnam was traded at $485/mt CFR, in line with prices fixed last week, by the end of the given period, a Japan-based supplier has already succeeded in achieving $490/mt CFR in a deal for 5,000 mt. Besides high demand for feedstock in Vietnam in general, the divergence of offers from the US scrap suppliers and bids from Vietnamese customers gives an additional support to Japanese scrap suppliers. Specifically, while ex-US scrap is available at $510/mt CFR Vietnam, customers are targeting to get $500-505/mt CFR, according to market sources.
As SteelOrbis reported earlier, this week the main EAF-based steel producer in Japan, Tokyo Steel, has declared a third consecutive rise in scrap purchase prices, having added a support to Japanese scrap suppliers. This time, the company has announced a JPY 500-1,000/mt ($4.5-9/mt) increase in its prices for H2 and shindachi scrap at all of its plants, except for Utsunomiya. As a result, the purchase prices for H2 have been settled at JPY 47,000-51,000/mt ($429-466/mt), while prices for shindachi scrap were fixed at JPY 49,000-56,000/mt ($447-511/mt).
On balance, the range of ex-Japan H2 scrap prices has risen to $JPY 47,000-48,000/mt ($425-434/mt) FOB, up JPY 1,000/mt ($9/mt) over the past week.