Prices for ex-Japan scrap have increased over the past week owing to the continuing global uptrend and higher demand, especially for high grade material in Asia. Stronger local scrap prices have also added to the situation in the export market for Japanese scrap.
The SteelOrbis reference price for Japanese H2 scrap has increased to JPY 28,500-29,500/mt ($274-283/mt) FOB, up by JPY 500/mt ($4.8/mt) from late last week.
Demand for Japanese scrap has become stronger in S. Korea. In addition to the reported earlier purchase of shindachi scrap by Hyundai Steel, the producer has bought H1, HS and shredded from Japan this week. New bids for H1 scrap are at JPY 29,500/mt FOB, new bids for HS and shredded are at JPY 32,000/mt FOB and new bids for shindachi stand at JPY 32,500/mt FOB. The prices have increased by JPY 2,500/mt ($24/mt) since the previous round of purchases by Hyundai Steel in the middle of October. Other steel mills in S. Korea have also been interested in purchases of higher grade Japanese scrap. As a result, the tradable value for H2 has improved to JPY 28,500/mt ($274/mt) FOB, even though demand for this grade has remained muted. “There is no demand for H2 in South Korea, but offers to other countries are higher,” a Japanese trader said.
Offers for H2 scrap to Vietnam have risen by $5/mt on average from last week to $315/mt CFR, which is equivalent to JPY 29,500-30,000/mt FOB. Customers have not been ready to accept this price level so far. But a level of around $310/mt CFR could be workable, according to sources. Last week, deals were concluded at $305-307/mt CFR.
There have been reports of a sale of H2 to Bangladesh at $315/mt CFR, which has also supported the sentiment.
Expectations for the near future have remained optimistic as a price increase is awaited in the Kanto Tetsugen export tender next week.