Prices for imported scrap in the Asian region have plunged by $20-30/mt recently, as confirmed in the latest bookings for Japanese scrap to S. Korea and by negotiations at a much lower level in Vietnam.
Ex-Japan scrap prices soften to $350/mt FOB in some deals
According to sources, Dongkuk Steel has purchased 2,000 mt of H2 scrap from Japan at JPY 36,400/mt ($350/mt) FOB, while 8,000 mt of the same grade have been traded to the same mill at JPY 36,500/mt ($351/mt) FOB, SteelOrbis has learned. This means the price has fallen by JPY 3,000-3,100/mt ($29-30) from last week’s bid announced by another mill Hyundai Steel at JPY 39,500/mt FOB.
Market sources said that, though they had not predicted such a sharp drop this week, it happened, driven by the sharp fall in the local Japanese market and extremely low demand in Asia.
The weak demand in the local market in Japan has been reflected in price cuts by Tokyo Steel every day this week. On January 27, the producer announced another drop in its domestic purchasing prices - by JPY 1,000-1,500/mt ($10-14) for all five of its assets. Prices for H2 have been lowered by JPY 1,500/mt for Tahara Works and Takamatsu Works to JPY 39,500/mt ($380/mt) and JPY 38,500/mt ($370/mt). For the other three plants, Tokyo Steel has decreased prices by JPY 1,000/mt. The price levels now come to JPY 39,500/mt ($380/mt) at Okayama and JPY 39,000/mt ($375/mt) at Kyushu. Tokyo Steel has announced its new price for H2 at the Utsunomiya asset at JPY 32,000/mt ($308/mt), while it was at JPY 33,000/mt just a day earlier and at JPY 40,000/mt last Friday.
Prices in Vietnam drop significantly after aggressive Japanese offers
Offers for Japanese H2 scrap have been heard at $400/mt CFR on Wednesday, January 27, though just a day earlier they were at $420-425/mt CFR. Sources have told SteelOrbis that suppliers have been trying to attract buyers, who started to bid at $400/mt CFR since late last week. Though there have been no reports of deals so far, some could be disclosed soon, though sources doubt that trading activity will be high in the current falling market.
The offer price level for ex-US HMS I/II 80:20 by bulk has been assessed by market sources at $430/mt CFR, down by $10-20/mt from last week. But buyers may consider levels not above $420/mt CFR, sources have said.
The SteelOrbis reference price for ex-Japan H2 scrap has dropped by JPY 2,750/mt ($26/mt) since early this week from the average level at JPY 40,250/mt ($387/mt) FOB to JPY 36,500-38,500/mt ($361/mt) FOB. The lower end of the range reflects the deals to S. Korea, while the higher end refers to offers to Southeast Asia.
Ex-US scrap sink below $400/mt CFR level in Taiwan
In Taiwan, prices for ex-US HMS I/II 80:20 scrap in containers have broken the $400/mt CFR mark, coming to $395/mt CFR, $10/mt, below late last week’s level. And sources said that some further decline is possible in the near future. “Scrap prices are in free-fall. But the question is how much space is left?,” an international trader said.