Japanese ferrous scrap export prices trended down this week since most buyer countries in Asia slowed purchases amid weak finished steel demand and expectations of a further decline in prices. Domestic scrap prices trended flat on the back of slow demand. But a low scrap generation and collection rates cushioned prices from falling.
Market participants believe demand for ferrous scrap could improve in the Japanese domestic market with expectations of a revival in finished steel demand. JFE Steel has already refired its idled BF at Fukuyama works, sooner than earlier scheduled in October-end amid such expectations.
Japanese currency depreciated to JPY105 levels against $1 from JPY104.5 a week ago. The depreciation failed to lift export prices since South Korea and Taiwan have reduced buying due to national holidays.
Tokyo Steel has kept its purchase prices flat since the prior week. Japanese HRC prices were also under pressure due to a fall in iron ore prices and the availability of lower-priced material from China.
In the Kanto region, #2 HMS was offered at JPY27,000/mt($255/mt) fas port with its index settling at JPY26,750/mt fas Japan, down by JPY500/mt from a week ago.
In the export market, offers for #2 HMS was at JPY27,500-28,000/mt fob Japan. The weekly index for Japanese #2 HMS dropped by JPY875/mt to JPY27,375/mt fob.
Offers for #1 busheling (Shindachi) were at JPY29,500/mt fas with its index settling at JPY29,375/mt fas, down by JPY375/mt from the prior week. The weekly index for #1 busheling (Shindachi) fell by JPY125/mt to JPY30,625/mt fob with no deals heard.
HS export offers were at $305/mt cfr Vietnam on Wednesday, with the index settling at JPY29667/mt fas, up by JPY167/mt due to supply crunch.
Shredded scrap prices were unchanged this week with no export orders and the index for the grade settled at JPY29,250/mt fas.
South Korean mills will be shutting EAF during the upcoming Thanksgiving holidays which could weigh down demand for imported scrap.
In other Asian markets, limited deals were heard as buyers are waiting for clarity in price direction from Turkey. Two Japanese bulk deals concluded for #2 HMS at $307/mt and $310/mt cfr Chattogram.
The index for #1 HMS fell by JPY300/mt and JPY250/mt to JPY28,200/mt fas and JPY29,250/mt fob Japan, respectively.
With a drop in Japanese ferrous scrap export prices, most mills in Taiwan and Korea are expected to resume bookings after their respective holidays end. Until recently, Taiwanese mills preferred domestic scrap, prices for which dropped by around $10/mt in the past few days.
Yards offered Japanese HMS 1&2 (50:50) at $290/mt cfr Taiwan, down by $5/mt from the prior week. Bids, however, were at $280-285/mt cfr Taiwan on Wednesday. The index for the grade decreased by $6/mt from the week prior and $12/mt from Sept 16 to $286/mt cfr.
The index for Japanese HMS 1&2 (50:50) dropped by $5/mt to $295/mt cfr Vietnam with few trades heard at $295-297/mt cfr. Bids for the grade were at $290-295/mt cfr Vietnam.
Vietnamese mills are exercising caution while buying imported ferrous scrap. But traders believe the scenario could change soon as steelmakers are likely to ramp-up production in the coming days.