Japanese scrap exporters have increased their offer prices significantly this week, supported by the sharp hike in the Kanto Tetsugen export tender, the rapid increase in ex-US prices and the overall limited availability of scrap in the Asian market. As a result, a number of bookings for Japanese scrap has been reported to different destinations, including Vietnam, Bangladesh and Taiwan.
Japanese scrap in demand at home and abroad
Ex-Japan H2 reference price has reached JPY 30,000-31,500/mt ($285-300/mt) FOB by the end of the week, up by JPY 1,500-2,000/mt ($14.3-19/mt) compared to last week, according to SteelOrbis’ information. The higher end of the range corresponds to the price level of the Kanto Tetsugen tender closed on November 11, while the lower end is the tradable value to S. Korea, where buyers are giving the lowest bid prices so far.
Demand for Japanese scrap in South Korea has remained muted as South Korean mills have been focused on purchases of local scrap and have enough stocks. Moreover, maintenance at such manufacturers like Hyundai Steel has reduced scrap consumption in November, and so importers from this country are just watching the market.
In the monthly Kanto Tetsugen scrap export tender in Japan, one lot for 15,000 mt of H2 has been sold at JPY 30,717/mt FAS, as SteelOrbis reported earlier and it has gone to Bangladesh. According to fresh information, this is equivalent to around $337/mt CFR. The second lot for 5,000 mt was traded at JPY 30,270/mt FAS to Vietnam.
Vietnamese customers accept $10-18/mt price increase this week
Early this week, deals for H2 scrap from Japan have been reported at $315-320/mt CFR Vietnam, while the price for a lot from Kanto tender corresponds to $328/mt CFR. Last week, the tradable value was assessed by most buyers at $310/mt CFR for H2 scrap. “Demand for billets is good, China is buying again,” a trader said, explaining the higher scrap prices in the latest deals to Vietnam.
Offers for ex-US HMS I/II 80:20 have been heard not below $335/mt CFR, while new bookings could be done at $330-335/mt CFR, sources have said, which is $15/mt above last week’s level.
Taiwanese customers feel more pressure from scrap shortage
The latest booking for ex-US HMS I/II 80:20 scrap in containers this week has been heard at $298/mt CFR Taiwan, up by $10/mt compared to late last week, SteelOrbis has learned. Prices in deals have been going up continuously since the start of the week. There was a deal at $290/mt CFR, then others at $293/mt CFR and $295/mt CFR. “We feel the shortage in the market, a lack of containers and higher freight,” a source at a local mill said, adding that US suppliers have been reducing the offered volume to Taiwan.
At the same time, prices for Japanese scrap have been going up even more rapidly. Offers for ex-Japan H1/2 50:50 scrap by bulk have been heard at $320-325/mt CFR, making it “tough to conclude a deal,” a representative of one mill said. The latest deal in the market for Japanese scrap has been heard at $315/mt CFR this week, up by $10/mt over the week.