Japan
In Japan, demand for finished steel remained slow amid an emergency imposed to curb COVID infections. With the resurgence of COVID, steel demand and consumption is expected to be hit ahead of the scheduled Olympics in August 2021.
Major HRC makers Nippon Steel raised prices by JPY10,000-15,000/mt ($92-138/mt) for June shipments on high global iron ore prices amid supply concerns. The spot 62pc iron ore prices reached $193.9/mt cfr China on Wednesday.
The weekly index for #2 HMS, Wednesday, rose JPY250/mt to JPY44,750/mt ($408/mt) fob. On fas basis, the index rose JPY500/mt ($4.6/mt) to JPY43,750/mt ($401.7/mt) fas Japan. Trades were limited as major South Korean mills kept away from fresh rounds of bidding for Japanese scrap.
Tokyo steel has held ferrous scrap purchase prices unchanged since April 21. Revival in domestic demand has reduced offers to the seaborne market. Scrap prices rose with importers competing for a limited volume of Japanese scrap.
Increased inquiries from China and other Asian countries could lift offers further, expect traders. The index for P&S 5ft (small bulk) China port settled at $506/mt cfr, up by $8/mt from the prior week on rising offers. Offers for P&S rose $505-510/mt cfr China while bids remained at $500-505/mt cfr on Wednesday.
In small bulk market, Japanese #1 busheling (Shindachi) traded at $530/mt cfr Vietnam. Offers for the grade rose above JPY50,000/mt fob due to a shortage of scrap and strong global cues. The weekly index for the grade rose JPY1,125/mt to JPY49,750/mt fob Japan, while on fas basis, the index rose JPY750/mt to JPY48,000/mt fas.
Japanese exporters sold P&S and #1 Busheling in small bulk to South Korean mills at JPY49,000-49,500/mt fob while shredded traded at JPY48,000-48,500/mt fob late last week and early this week.
The weekly Davis indexes for shredded and HS, Wednesday, fell by JPY750/mt to JPY47,750/mt and JPY48,000/mt fas Japan, respectively amid limited trades. Announcement of emergency in four states to curb increasing COVID infections pressured demand while supplies eased this week.
Offers for Japanese HMS 1&2 (50:50), Wednesday, rose to $475-480/mt cfr Vietnam, up by $5-10/mt from the prior week with the index for the grade settling at $475/mt cfr Haiphong, up $7/mt on limited availability and elevated small bulk freights.
The index for Japanese HMS 1&2 (50:50) rose $5/mt to $463/mt cfr Taiwan. Traders said prices are supported by rising Japanese scrap offers and Chinese steel futures. Most offers remained unchanged from last week at $465-470/mt cfr against bids of around $450-455/mt cfr Taiwan. The disparity between bids and expectations reduced the number of trades this week.
South Korea
The Davis Index for containerized HMS 1&2 (80:20), Wednesday settled at $430/mt cfr South Korea, up by $4/mt from the prior week. Mills refuse to accept above $425-430/mt cfr South Korea levels for containerised HMS amid ample availability of domestic scrap, however, increased freight rates pushed offers up.
Mills in Korea are interpreting the impact of the cancellation of steel export rebates offered to Chinese mills. China has waived off export incentive on most steel products including rebar, wire rod, HRC and billets. For the non-ASEAN countries, China lowered import duties to zero. Appetite for steel import in China is likely to benefit the industry keeping global steel prices elevated in the near terms, believe traders.
The Davis index for P&S 5ft, Wednesday, rose $4/mt to $455/mt cfr South Korea from the prior week, while the index for #1 HMS and shredded increased by $2/mt to $437/mt cfr South Korea. Trades for medium and low-grade scrap in containers remained paused as most buyers bought only premium grades from the overseas markets.
Traders decided to holdback purchases amid a rise in Japanese scrap offers this week. Offers for #2 HMS rose JPY500-1,000/mt to JPY43,500-44,000/mt fas from week prior.
In Asian bulk markets, in absence of South Korean mills, Vietnamese and Thai mills booked bulk cargoes paying higher. While Malaysian and Indonesian mills restocked scrap for post Ramadan demand supported by improved demand for billet exports.
Taiwan
Imported ferrous scrap offers jump in Taiwan following high freight rates and increased steel demand. The Davis Index for containerized US-origin HMS 1&2 (80:20), Wednesday, jumped by $7/mt to $433/mt cfr Taiwan from Tuesday with offers up in the range of $435-440/mt cfr Taiwan.
In line with rise in Taiwanese prices, South Korean mills decided to hold import bookings in containers. Sharp rise in iron ore prices in China and higher prices for HRC, rebar and billet have boosted Taiwanese appetite for ferrous scrap imports.
($1=JPY108.9, TWD27.9, KRW1111)