The reversal of the trend in the global scrap market, coupled with mounting uncertainty among market insiders with regard to the future market prospects amid recent developments in China’s steel market, have continued to encourage Japanese steelmakers to cautiously revise their bids for scrap.
In particular, Tokyo Steel, the main EAF-based steel producer in Japan, has lowered its purchase scrap prices for one of its mills, namely the Tahara plant, for the third consecutive time. However, even after the recent revision the prices for the mill in question remain the highest compared to the producer’s other mills.
Accordingly, on November 4 the company has announced a further JPY 500/mt (around $4.4/mt) decrease in its H2 and shindachi scrap at the abovementioned plant to JPY 57,000/mt ($500/mt) and JPY 63,000/mt ($553/mt) respectively. Meanwhile, purchase scrap prices for other mills have remained unchanged. Consequently, Tokyo Steel’s new price levels for H2 scrap stand at JPY 52,000-57,000/mt ($456-500/mt), while for shindachi scrap they are at JPY 54,500-63,000/mt ($478-553/mt). The lower end is still valid for the Takamatsu plant, while the higher end is for the Tahara plant. All prices are delivered and effective from November 5.
As regards Japanese scrap exports, prices have appeared under stronger pressure from the increase in material availability and lower trading activity, especially for lower grades. “Basically, Vietnamese buyers are in a wait-and-see stance, expecting a further drop,” a Japanese trader said. Bids for H2 from Vietnam were all below $530/mt CFR.
Also Japanese offers for H1/2 50:50 by bulk to Taiwan have been reported at $525-535/mt CFR this week, which is equivalent to not below JPY 54,000/mt ($474/mt) FOB for H2, excluding freight and grades extras.
“Japanese EAF mills’ buying price for H2 is at JPY 54,000-56,000/mt delivered by truck delivery,” a local source said, explaining why export prices have not dropped more by now.
Overall, market sources are waiting for the results of tenders of two major mills in South Korea tomorrow, where bids are expected to be lower.
The SteelOrbis reference price for H2 scrap is at JPY 54,000/mt ($474/mt) FOB for now, down by 500/mt ($4.4/mt) on average from the range of JPY 54,000-55,000/mt ($474-483/mt) FOB reported in late October.
|
Plant |
H2 |
Shindachi |
||
|
Price (JPY/mt) |
Price change (JPY /mt) |
Price (JPY/mt) |
Price change (JPY/mt) |
|
|
Tahara |
57,000 |
-500 |
63,000 |
-500 |
|
Okayama |
55,000 |
0 |
58,500 |
0 |
|
Kuyshu |
56,000 |
0 |
58,000 |
0 |
|
Utsunomiya |
56,000 |
0 |
58,000 |
0 |
|
Takamatsu |
52,000 |
0 |
54,500 |
0 |