A bearish mood has prevailed in the Asian scrap market this week as slower buying activity in such countries as South Korea, Vietnam and Taiwan has pushed exporters to cut prices further. Deal price levels have dropped by $10-15/mt on average.
South Korea bids for high grade Japanese scrap, demand for H2 stalls
Late this week, Hyundai Steel has announced its new bids for Japanese scrap. It has asked JPY 25,000/mt ($232/mt) FOB for ex-Japan HS scrap, Shindachi or busheling. There are no fresh bids for H2 scrap, but the difference between HS and H2 prices is assessed by market participants at JPY 2,500/mt or $23/mt, and so the workable price level for ex-Japan H2 scrap can be set at JPY 22,500/mt ($209/mt) FOB. Nevertheless, for now only higher grade scrap is in demand in South Korea, sources said.
As SteelOrbis reported earlier this week, Japanese scrap exporters have cut their H2 offers of to JPY 23,000-23,500/mt ($214-219/mt) FOB, down by JPY 1,000/mt ($9.3/mt) compared to the tradable value last week and down by JPY 1,500-2,000/mt ($14-19/mt) compared to previous offers.
Rare bids for Russian A3 scrap from South Korea were heard at $235/mt CFR, while the workable level was at $250/mt CFR or slightly above last week’s level.
Taiwanese customers buy scrap cautiously amid sharp price fall
Growing offer volumes of major suppliers from the US and Japan and still limited demand in Taiwan this week have led to one of the sharpest falls among Asian buyers-countries. Late this week, deal prices for ex-US HMS I/II 80:20 in containers touched $230/mt CFR Taiwan, while earlier this week some tonnages were traded at $230-235/mt CFR. This means prices have lost $15/mt from last Friday. “Before last week there were some shortages of scrap offers, but now we receive many offers and can choose,” a local importer said.
The latest contracts for Japanese H1/2 50:50 by bulk have been signed at $240-245/mt CFR, falling from $250-255/mt CFR in the middle of the week and $260/mt CFR last week. “Most mills will wait and see as next week prices may keep dropping,” one of mills in Taiwan said. However, there are some expectations also that demand for Japanese scrap will increase as the gap with US prices declines from $15/mt to $10/mt. And, as a result, suppliers may try to hold prices stable for the near future.
Vietnam interested in Japanese scrap purchases after discounts
Vietnamese customers decided to conclude a number of deals for Japanese H2 scrap in the second half of the week, receiving discounts at $10/mt compared to last week. Some tonnages have been traded at $247-252/mt CFR, while one deal was heard at $245/mt CFR Vietnam on Friday. Last week, offers for this scrap grade were mostly at $260/mt CFR, while bids were at $255/mt CFR. “Vietnamese customers are in the market and there were many negotiations,” a trader said. New bids for H2 scrap have been reported at $245/mt CFR and below, while customers have also been looking for scrap of other origins.