Posted on 06 Oct 2016
Japanese scrap export prices decreased during the week in tandem with falling scrap markets elsewhere including Turkey. Trading activity for Japanese scrap was thin, trading sources in Tokyo and Seoul said.
S&P Global Platts assessed its weekly H2 scrap export price at Yen 19,000/mt ($185/mt) FOB Tokyo Bay, Wednesday, down Yen 250/mt from mid-point of last week’s assessment of Yen 19,000-19,500/mt.
South Korea’s leading EAF mill Hyundai Steel placed its bid prices on September 30 at Yen 19,000/mt FOB for H2 grade and Yen 22,000/mt FOB for Shindachi grade, down Yen 1,500/mt from the previous bid price on September 9, trading sources in Seoul and Tokyo said.
The South Korean mill, however, declined any offer for H2 scrap solely.
It only accepted offers for bundle cargoes comprising Shindachi and H2. In that September 30 tender, Hyundai purchased a total of 40,000-50,000 mt, of which most comprised Shindachi grade scrap, Korean trading sources said.
Korean trading sources said that the leading South Korean mill has no plan to open its weekly tender for Japanese scrap this week, a Seoul-based trader said.
Korean trading sources said that Hyundai Steel has accumulated scrap inventories of around 700,000 mt and can afford to delay buying scrap.
Japanese scrap export bookings to other Asian customers were also quiet during the week.
Buyers are awaiting for Japanese scrap prices to fall further, Japanese and Vietnamese traders said. Vietnamese customers are waiting for the results of the next Kanto Tetsugen export auction for H2 scrap which will open on October 13, they said.
Awarded Kanto Tetsugen parcels in recent tenders were exported to Vietnam so the winning tender prices would reflect the sales price to Vietnam.
Japanese traders are currently offering H2 scrap at around $220/mt CFR Vietnam, (equivalent to around Yen 19,510/mt FOB) but Vietnamese customers are targeting to book at $10-15/mt below this level.
In Japan, Japanese traders are currently paying Yen 18,000/mt FAS to collect H2 material to be exported from eastern Japan, down Yen 500/mt from a week ago. Japanese domestic mills have been holding their scrap buying prices and have accumulated sufficient scrap stocks to operate during the approaching longer weekend.
Monday October 10 is a Japanese holiday and mills will operate fully in order to benefit from cheaper power charges during the holiday.
Japan’s leading mini-mill, Tokyo Steel Manufacturing has been holding its scrap buying prices since September 6 arrivals, the company is currently paying Yen 20,000/mt truck delivered to Utsunomiya works, north of Tokyo.
In South Korea, Hyundai Steel announced Wednesday that it will lower its buying prices for domestic scrap by Won 10,000/mt ($9/mt) effective October 10.
Meanwhile, the East Asian bulk HMS scrap market continued to be quiet amid sluggish steel demand and bearish sentiment. No recent US bulk scrap deals were heard since the Korean US bulk scrap booking on September 23.
Vietnamese trading sources heard a US supplier offer bulk scrap last week at $226/mt CFR Vietnam HMS I/II 80:20 basis for November shipment, but traders did not hear of any deal transpiring from the offer.
“We heard that most customers are not showing interest,” a Vietnamese trader said, adding that there is a preference for “small bulk vessels as the market looks weak.”
An Australian supplier said it sold a prompt cargo of around 15,000 mt of HMS I/II 80:20 scrap at $230/mt CFR Vietnam last week, the same price level concluded in Vietnamese orders which took place early September 19 week.
A Taiwanese trader said he has not heard of any recent sales of bulk scrap.
“Every market has slowed down particularly in Korea, Vietnam and Taiwan,” he said.
He attributed this to the fall in Chinese billet prices as well as weak demand for rebar. Scrap markets are currently weak in many countries right now, he said.
Platts maintained its East Asian bulk HMS I/II 80:20 scrap assessment at $220-225/mt CFR, with an implied midpoint of $222.50.
