Japanese ferrous scrap export prices declined this week driven by a drop in domestic scrap prices and weak global cues. Despite limited supply of scrap in Japan’s domestic markets, prices were under pressure as Tokyo Steel lowered its domestic scrap purchase price.
Additionally, the Japanese government mulls over the cancellation of the Olympic games 2020 which could impact the demand for steel.Processor yards believe prices are unlikely to fall furtheras scrap generation rate has declined due to a halt in auto production and reduced output by steelmakers.
Japanese ferrous scrap export prices were flat to down in the week due to thinned trading. Average bids at Kanto Tetsugen March ferrous export tender declared on March 11, declined by JPY96/mt from February.
Mills in Taiwan and Vietnam preferred Japanese scrap over the US and European origin cargoes as container freight rose. After two weeks of silence, mills in South Korea initiated trades for Japanese ferrous scrap. The weekly Davis Index for #2 HMS settled at JPY23,250/mt ($221/mt) fob Japan on Wednesday, down JPY500/mt. Trades of #2 HMS with mills in Vietnam and South Korea concluded at JPY23,000-23,500/mt fob Japan. A few yards offered #2 HMS at JPY23,500-24,000/mt fob Japan, with no takers at those levels.
The Davis Index for Busheling settled at JPY26,000/mt ($247/mt) fob Japan on Wednesday, down by JPY500/mt from the prior Wednesday. Trades with Vietnamese mills were reported at the index price. Yards turned to overseas buyers amid an oversupply of Busheling relative to weak domestic demand.
Japanese HMS 1&2 (50:50) in small bulk cargoes was offered at $250/mt cfr Vietnam. Bids in the market were few and the index for the grade settled at $250/mt cfr Vietnam, down by $3/mt from the prior week.
The Davis Index for Japanese HMS 1&2 (50:50) in small bulk cargoes settled at $243/mt cfr Taiwan, down by $2/mt from prior Wednesday. Bids for the grade were at $240-243/mt cfr Taiwan and offers at $245-250/mt cfr Taiwan. Japanese HS scrap in bulk cargoes traded at $265-270/mt cfr Vietnam.
The weekly index for #2 HMS settled at JPY21,750/mt fas Tokyo bay, down by JPY250/mt. Yards are paying JPY21,500-22,000/mt fas Tokyo bay for collection of the grade.
Trades for shredded and HS in containers concluded at JPY23,750-24,000/mt fas Japan, down by JPY250-500/mt from the prior week.
Tokyo Steel announced a third price cut in March for domestic ferrous scrap purchase on Wednesday. The steelmaker lowered its purchase prices at Kyushu plant by JPY500/mt effective March 12 for all grades of scrap. Bids for #2 HMS fell to JPY18,500/mt del Kyushu plant. Earlier, the mill had lowered its prices by JPY500/mt only at Kyushu plant effective March 7.
Bids remained unchanged at its four other plants. Prices for #2 HMS in Utsunomiya, Tahara, Okayama and Takamatsu were unchanged at JPY19,500/mt, JPY20,500/mt, JPY19,000/mt and JPY18,000/mt, respectively.
Bids for Bushelling remained at JPY22,500/mt del Tahara and JPY21,500/mt del Utsunomiya.
South Korea imports
After a gap of around three weeks, bulk bookings resumed in the South Korean market. A mill booked Japanese #2 HMS in bulk cargoes at JPY23,000-23,500/mt ($219-224/mt) fob Japan, down by JPY500/mt from the prior week. Mills, however, stayed away from Russian and US origin cargoes.
The weekly Davis Index for containerised HMS 1&2 (80:20) settled at $243/mt cfr South Korea, down by $6/mt. The weekly Davis Index for containerised shredded settled at $253/mt cfr South Korea, down by $6/mt in line with a drop in the US-origin west coast ferrous scrap prices by $5-10/mt early this week. Bids from mills were at $245-250/mt cfr South Korea.
Japanese origin Busheling (shindachi) scrap traded at JPY26,000/mt fob Japan in bulk cargoes.