With downward pressure in the Asian scrap market mounting lately, Japan-based scrap sellers have no other choice but to lower their export quotations. Most scrap suppliers have not been in a hurry to be highly aggressive, having considerable support from strong demand locally, but a number of suppliers, who have sizable allocations, need to accept buyers’ terms. Consequently, some bookings have been concluded at lower prices.
South Korean producer Hyundai Steel has recently managed to book 30,000 mt after announcing its new bids earlier this week, when the ex-Japan H2 scrap price slipped to JPY 49,500/mt ($431/mt) FOB. “We had to reject more than half of the materials that were willing to meet our price. So I think the price definitely has more room to go down,” a mill source said. As SteelOrbis reported earlier, the H2 price is down JPY 1,000/mt ($9/mt) from bookings last week and JPY 2,000/mt ($17.4/mt) lower as compared to the previous levels announced by Hyundai Steel.
Meanwhile, ex-Japan H2 scrap offers to Vietnam have decreased by $10-20/mt over the past two weeks to $500-515/mt CFR, but customers are said to be seeking to pay not higher than $480/mt CFR.
On balance, the SteelOrbis reference price for export H2 scrap from Japan has decreased further by JPY 1,000-2,000/mt ($9-17.5/mt) to JPY 49,500-51,000/mt ($433-446/mt) FOB levels.
Export HS scrap trading to China has dwindled recently to nothing, with Chinese steelmakers having no interest in imports as of now due to unworkable prices. Specifically, local scrap prices in China are around $100/mt lower than the Japan-based sellers would seek to get in exports to China. The latest ex-Japan HS scrap offers to China have been reported at $540/mt CFR.
Meanwhile, in the domestic market Japanese scrap suppliers have continued to enjoy higher prices, though the latter have declined here as well recently. While H2 scrap prices are at JPY 54,000-55,500/mt ($472-481/mt) delivered, HS scrap is available at JPY 63,000-65,000/mt ($551-568/mt) delivered. Meanwhile, shindachi scrap is offered at JPY 65,000-67,000/mt ($568-585/mt) delivered.