Following the cancelation of Japan’s Kanto export scrap tender on November 9, demand for import scrap in Vietnam and South Korea is still close to zero. Producers in both countries are working with local scrap as they seek to maintain their production rates. A Vietnamese source reports that some blast furnaces are now idle, with no restart expected in the short term. “We are monitoring the stimulus packages announced or planned to be announced by China. They may have a positive impact in Vietnam as well as on the other Southeast Asian countries,” the source added.
SteelOrbis has heard that Japanese H2 scrap prices offered to Vietnam are at around $380/mt CFR, with no deals closed at this level. At the end of October, offers for this grade were at around $400/mt CFR Vietnam. According to a Japanese source, ex-Japan H2 grade scrap quotations have some more room to decline since there is very low demand in the export markets. “I think we can expect Tokyo Steel to announce another price decrease towards the end of this week,” the source reported.
Meanwhile, offers for ex-Hong Kong HMS I/II 50:50 scrap by bulk to Vietnam are at around $335/mt CFR, again with no deals done yet. Offers for this material were at $380/mt CFR at the end of October. However, SteelOrbis has learned that local scrap prices in Vietnam right now are at around $280/mt for delivery to mill, and are more attractive under the current circumstances for Vietnamese mills.
Over the past two weeks, Tokyo Bay FAS-based prices for H2 grade scrap have decreased to JPY 46,500-47,500/mt ($333-341/mt) from JPY 49,000-50,000/mt ($332-338/mt). Amid the appreciation of the Japanese yen, an increase in dollar-based prices is observed. This new level signals a 47,500-48,500/mt ($341-348/mt) FOB for this grade. The FOB-based and dollar-based prices have increased by $3/mt since November 4.
The SteelOrbis reference price for ex-Japan H2 scrap has moved down by JPY 5,000/mt on the lower end and by JPY 2,500/mt on the upper end to JPY 45,000-48,500/mt ($323-348/mt) FOB. Due to the fluctuation of the Japanese yen against the US dollar, dollar-based prices have softened by $15/mt on the lower end and increased by $3/mt on the upper end. The lower end of the price range represents the offers levels shared with Vietnam, as the upper end is represented by the Tokyo Bay FAS prices.
Tokyo Bay FAS prices for HS have also moved down from the range of JPY 51,000-53,000/mt ($345-358/mt) to JPY 49,000-50,500/mt ($351-362/mt). Tokyo Bay FAS prices for shindachi scrap have decreased from JPY 50,000-51,000/mt ($339-345/mt) to JPY 47,500-49,000/mt ($341-351/mt).
No bids from South Korea for Japanese H2 scrap have been announced this week. The most recent bid from South Korean steelmaker Hyundai Steel for Japanese scrap was announced on October 5 and was at JPY 48,000/mt ($332/mt-– exchange rate at JPY 144.51 to a dollar) FOB.
This week, some US West Coast suppliers have indicated offers to South Korea at around $375-380/mt CFR. A South Korean source commented, “This level is a bit higher than the current market price.”
Domestic A weight scrap prices at Hyundai Steel’s Incheon, Dangjin and Pohang plants are in the range of KRW 507,000-520,000/mt ($386-396/mt) from the levels of KRW 555,000-567,000 ($391-339/mt) recorded two weeks ago. Meanwhile, Dongkuk Steel’s domestic A weight scrap procurement prices at its plants are similar to Hyundai Steel’s prices.
$1 = JPY 139.47
$1 = KRW 1,313.30
