Japanese and US scrap exporters bullish in Asia, further rise possible

Friday, 30 October 2020 17:11:08 (GMT+3)   |   Istanbul

Prices from the major Japanese and the US scrap suppliers have increased in the Asian market over the past week. New deals at higher prices have been heard in Vietnam, while demand has been moderate in Taiwan and has remained weak in South Korea, though signs of an uptrend have emerged in the latter as well. Most sources hold positive views of the price direction in the near future.

Japanese suppliers insist on higher prices despite resistance

Japanese suppliers have managed to get higher prices in deals. In particular, this week bookings have been heard at $305-307/mt CFR, which is equivalent to JPY 28,700-28,900/mt FOB. Offers have continued to go up after these deals - they are coming mainly at $310/mt CFR Vietnam.

In S. Korea, demand for imported scrap has been weak, but domestic scrap prices have stopped falling and the tradable value has increased from JPY 27,000-27,500/mt FOB last week to JPY 28,000/mt FOB, as this is the lowest possible level which could be achieved by buyers from Japanese suppliers. And even if S. Korean buyers become more active in the near future and are ready to pay such a price, most exporters will remain absent from sales, seeing the possibility for prices to increase further.

The SteelOrbis reference price for Japanese H2 scrap has increased by JPY 500/mt ($4.8/mt) since last week to JPY 28,000-29,000/mt ($268-278/mt) FOB.

Vietnam buys ex-US scrap at higher prices

According to sources, following good demand last week Vietnamese customers have continued booking bulk scrap this week. A contract for an ex-US mixed cargo of HMS I/II 80:20 and shredded scrap has been done at $315/mt CFR, up by $3/mt from the previous booking of the same origin scrap. “As Japanese suppliers are asking $310/mt CFR, export prices from the US may go up to $320/mt CFR, according to a source.

A further increase in the Vietnamese scrap market will depend on the billet and longs prices in the country.  Recently, demand for imported billet in China has slowed down, which affected sentiment a bit.

Steel prices support scrap uptrend in Taiwan

Ex-US HMS I/II 80:20 scrap in containers has been traded at $282/mt CFR Taiwan by the end of the current week, up by $2-7/mt compared to the last week’s price assessment, SteelOrbis has learned. “Steel demand is quite good in Taiwan now. Finished steel prices are unlikely to decrease, so scrap prices will be stable or rise,” a local steel producer said.

The tradable price level for ex-Japan H1/2 50:50 scrap by bulk has increased to $300/mt CFR, up by $2-5/mt from last week. But offers have been mainly at $305/mt CFR. It is more reasonable for customers to buy ex-US scrap, but the overall supply volume from the US has been limited so far. Some Taiwanese mills have been purchasing scrap in the local market as a result.

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