Prices for imported scrap have increased further in South Korea, Taiwan and Vietnam, with the main focus remaining on supply from Japan, while offers from the US have been limited.
Ex-Japan scrap prices rise steadily, supported by local gains
The SteelOrbis reference price for ex-Japan H2 scrap has surged to JPY 42,000-43,300/mt ($407-419.5/mt) FOB this week, up by JPY 2,000-3,300/mt ($19-32/mt) from last Friday. The lower end of the range corresponds to the price level from Japan to S. Korea late this week, while the higher end of the range is equivalent to the deal level to Vietnam for H2 scrap. According to sources, at least two deals have been done to Vietnam at $450/mt CFR for this grade, while offers for H1/2 to Vietnam were reported at $450-460/mt CFR in the middle of the week. Last week, the reference price for ex-Japan H2 scrap to Vietnam was at $410-415/mt CFR.
Such an aggressive policy of Japanese scrap exporters are explained by the tight supply and good demand in the local market and surging prices in Turkey and other major destinations. In the Japanese domestic market, Tokyo Steel increased its local scrap purchase prices three times this week. The latest change has been announced on Friday, December 18, with the producer hiking prices for four out of five its assets by JPY 1,000-1,500/mt ($9.7-14.5/mt). The H2 price level for Tahara Works has remained at JPY 40,000/mt, while for Okayama, Kyushu and Utsunomiya prices have gone up by JPY 1,000/mt to JPY 39,500/mt, JPY 37,000/mt and JPY 37,000/mt, respectively. The price level for Takamatsu has been settled at JPY 37,000/mt as well, up by JPY 1,500/mt from the previous price announced on Wednesday. All prices are delivered and effective from December 19. Compared to late last week, prices at Tokyo Steel plants have risen by JPY 2,500-5,000/mt ($24-48/mt) depending on the asset.
South Korean mills have to accept higher prices
Major mills in South Korea purchased sizable volumes from Japan last week, more than 60,000 mt, when ex-Japan H2 scrap was priced at JPY 40,000/mt ($388/mt) FOB. A few Japanese suppliers have said that for now S. Korean customers will find it hard to buy this grade even at JPY 42,000/mt FOB and most offers are at JPY 43,000/mt FOB and above.
According to sources, a small tonnage of ex-Russia A3 scrap has been sold at $435/mt CFR to S. Korea this week. No fresh firm offers have been heard from the US to South Korea and sources estimate the tradable value for ex-US HMS I at above $450/mt CFR.
Taiwanese buyers have to buy from Japan as US offers disappear
Early this week, some offers and deals for ex-US HMS I/II 80:20 scrap in containers in Taiwan were at $405/mt CFR, up by $25/mt from last week. “But since Wednesday offers have disappeared and next week they could reach $420/mt CFR. The market is crazy,” a Taiwan-based steel mill told SteelOrbis. Sources have said that steel producers have been facing very tight supply and that the current rally is “dangerous, as later prices can fall as fast as they are surging now,” a source said.
Offers for ex-Japan H1/2 50:50 scrap by bulk have surged to $455/mt CFR late this week, up by $25-30/mt week on week. A deal was done at $445/mt CFR earlier this week, but this level is already unavailable on Friday. “The market in Taiwan is following the global market. The bubble is growing,” a trader said.