Though offered volumes of scrap from the US to Asia have been far lower this week, customers from major countries have been resisting price increases. Bids for Japanese scrap have even moved down further. As a result, for now sellers’ attempts to hike prices are mostly seen, while the real market price level has remained low.
Bids from South Korean customers down
Hyundai Steel has announced its new bid for Japanese scrap on Friday, April 10, after a break. A bid for H2 scrap has been cut to JPY 18,500/mt ($170.6/mt) FOB, down JPY 500-1,000/mt ($4.6-9.2/mt) from the previous transaction level to South Korea. This price level has been assessed by most sources as too low and for now major Japanese suppliers have rejected selling at such a level. Hyundai Steel’s bid for shindachi scrap has been lowered to JPY 21,000/mt ($193.7/mt) FOB.
Moreover, there has been a deal for 20,000 mt of Russian A3 scrap at $209/mt CFR South Korea recently, which is just $1/mt below the previous contract made last week.
Local scrap prices in Japan decline, export prices try to hold
On Friday, April 10, Tokyo Steel announced that it will cut local scrap purchase prices by JPT 500/mt ($4.2/mt) for two of its plants, effective from April 11. The H2 price for the Tahara factory has declined to JPY 19,500/mt ($180/mt), while the price for Utsunomiya has been cut to JPY 18,500/mt ($170.6/mt). For the other three plants of Tokyo Steel, scrap prices have remained stable at JPY 17,500-18,500/mt delivered.
Ex-Japan prices in the export market have also been under pressure this week. The latest deals for H2 have been at JPY 19,000-19,500/mt FOB to South Korea, which is JPY 500/mt below the level seen late last week. Nevertheless, most sources believe that export prices have reached or “almost reached” the bottom. “The supply volume will be cut as Japan has declared a state of emergency [due to covid-19],” a trader said.
Ex-US scrap booked below $200/mt CFR in Taiwan, offers rebound
According to SteelOrbis’ information, deals for ex-US HMS I/II 80:20 in containers were signed at $200/mt CFR in Taiwan late last week, which has been disclosed this week, $5/mt below the previous level. Moreover, early this week negotiations were already held at $195/mt CFR Taiwan and some rare contracts were signed at $195-200/mt CFR. However, most suppliers have decided to withdraw offers late this week and the overall offers this week have been “very very few,” most customers have said. Some mills have received offers at $205-210/mt CFR Taiwan from the US late this week, but this has not been reflected in transactions so far.
The latest contracts for Japanese HMS I/II 50:50 scrap by bulk have been closed at $210/mt CFR Taiwan, but at the moment they are coming back again to $220/mt CFR
Vietnamese customer refuse to purchase at higher level
Japanese suppliers have attempted to increase H2 scrap offers to Vietnamese customers by $10/mt to $230-235/mt CFR after the higher-than-expected price in the Kanto Tetsugen export tender earlier this week. Nevertheless, “there are no buyers taking this,” a trader said.
The workable level for HMS I/II 80:20 has indicatively increased by $5/mt over the past week to $240-245/mt CFR Vietnam, while rare offers from the US have been heard at $250/mt CFR. Customers have mostly not been giving firm bids, waiting for a clearer trend next week.
