Japanese scrap suppliers have raised their offer prices further in the first half of this week amid higher demand among Asian customers for bulk cargoes earlier and the shortage of containers which has persisted in the market. At the same time, local scrap prices in Japan are still weak and Tokyo Steel has even announced some decrease in purchase prices at one plant today, February 27.
Ex-Japan H2 scrap has been offered at JPY 24,500-25,000/mt ($223-232/mt) FOB, up by JPY 1,000/mt ($9/mt) compared to last week. More inquiries have been heard from different Asian countries for bulk scrap cargoes from Southeast Asian countries and Taiwan over the past week. However, together with the price increase, demand in the Asian market has started to slow down. At the same time, customers from South Korea have been quiet and they are unlikely to fully accept the price increase from Japanese suppliers, sources have said. “Hyundai Steel will announce its bid tomorrow and it is expected to be at around JPY 24,000/mt FOB for H2,” an Asian trader said.
Despite the recently announced increase in offers, the workable price level will be JPY 24,000-24,500/mt ($218-223/mt) FOB in the near future, most market participants have said.
Since activity has been weak in Vietnam this week, nominal prices for ex-Japan H2 to this destination have remained at $255-260/mt CFR.
On February 27, Tokyo Steel has cut H2 scrap purchase price at its Kyushu plant by JPY 500/mt ($4.5/mt) to JPY 19,500/mt ($177/mt) delivered. Prices for the other four plants of Tokyo Steel have remained the same. This has been the first adjustment since February 12.