Domestic and export prices of ferrous scrap in Japan increased with offer prices rising almost daily. Tokyo Steel raised domestic scrap prices for the sixth time in December. Effective Dec 17, Tokyo Steel’s ferrous scrap purchase prices rose by JPY1,000-2,000/mt ($10-19/mt) with new #2 HMS price at JPY40,000/mt ($387/mt) del Tahara plant.
Increased buying in Turkey coupled with bullish offers from scrap exporting countries has led market participants to expect a further rise in global ferrous scrap prices. In Turkey, the daily Davis Index for HMS 1&2 (80:20) settled at $426.67/mt cfr on Tuesday, up by $67/mt from Dec 1.
Asian buyers are cautious, but market participants do not foresee a fall in December prices rather they expect a further boost after the Tokyo Steel’s sixth price hike for domestic scrap. Mills are worried about maintaining profit margins amid rising input costs. As per traders, before any trade concludes, the offer prices rise by $10-15/mt cfr, additionally, exporters are offering scrap $30-40/mt above the bids placed by the mills, making it unworkable for the buyers.
The weekly Davis Index for #2 HMS rose by JPY3,955/mt to settle at JPY39,205/mt ($379/mt) fas amid rising offers. In the export market, the weekly index for the same grade rose by JPY4,042/mt to JPY40,292/mt fob Japan. Deals for the grade heard at JPY40,000/mt fob late last week.
In the Kanto region, the Davis Index for #1 HMS settled at JPY40,167/mt fas port, up by JPY3,792/mt. The index for the same grade rose by JPY4,125/mt to JPY41,500/mt fob Japan, with deals reported at JPY40,000/mt fas.
Offers for Japanese #1 busheling (Shindachi) rose to JPY44,000/mt. The weekly index for the grade rose by JPY3,045/mt at JPY41,295/mt fas and up by 10.7pc or JPY4,214/mt at JPY39,826/mt fob Japan. Market participants opined that Turkish deals indicate prices will remain high till January. High offers are making it difficult for importers to place matching bid.
The weekly Davis Index for HS and shredded grade rose by JPY4,167/mt and JPY4,542/mt to JPY42,417/mt fas, respectively. Deals heard at JPY42000-42500/mt fas for both grades in limited quantities.
Yards offered Japanese HMS 1&2 (50:50), Wednesday, at $425-430/mt cfr Taiwan, up by $50/mt from the prior week. The index for the grade rose by $37/mt to settle at $411/mt cfr Taiwan. In Vietnam, the index for Japanese HMS 1&2 (50:50) increased by $30/mt to settle at $415/mt cfr, with no trades heard. Offers for the grade rose to $430/mt cfr Vietnam on Wednesday.
($1=JPY103)