Following the softening of scrap deal prices in the Turkish market, South Korea-based steelmakers have not taken long to adjust their bids for ex-Japan scrap downwards. However, it remains to be seen, whether the customers would succeed in sizable bookings at targeted prices, considering the looming shortage of scrap in Japan. For instance, domestic EAF mills in Japan, located in Osaka region have been forced to pay around JPY 1,500-2,500/mt ($14-23/mt) more in comparison to prices valid in the Kanto region, having faced the scarcity of material, according to sources.
Nevertheless, this week the major S. Korean mill Hyundai Steel has attempted to lower its bid for ex-Japan HS and shindachi grade scrap to JPY 60,000/mt ($546/mt) FOB and JPY 64,000/mt ($582/mt) FOB, respectively, down JPY 2,000/mt ($18/mt) compared to the prices fixed at deals last week. Market sources believe that there will be no significant bookings for higher grade Japanese scrap in the export market at lower price level as sellers may keep selling available tonnages to the local mills, which are paying stable prices. “The generation of shindachi is less, so suppliers do not want to sell,” a local trader said.
Meanwhile, price level for ex-Japan H2 scrap by Hyundai Steel has been voiced at JPY 47,000/mt ($427/mt) FOB, down JPY 500/mt ($4.5/mt) within the given period. For shredded scrap, Hyundai Steel is said to have set its bid at JPY 57,000/mt ($518/mt) FOB.
While no deals have been reported so far, the reference prices for ex-Japan H2 scrap has hovered at JPY 47,000-48,000/mt ($427-434/mt) FOB, only lower end of the range has been reduced by JPY 500/mt ($4.5/mt) over the week.
Meanwhile, China has remained unattractive for Japanese scrap exporters due to the divergent interests of buyers. Specifically, while Chinese customers are reluctant to book HS scrap at higher than $540-550/mt CFR, Japan-based suppliers are hard to sell at lower than $600/mt CFR.
No trading activity has reported in Vietnam and Taiwan, with demand in these markets severely stymied by Covid-19-related situation. Specifically, as SteelOrbis reported earlier, prices for ex-Japan H2 scrap to Vietnam have gone down to $480/mt CFR, failing to attract any interest.