"The new strain could make scrap collection harder in Europe and wherever it spreads to, reducing the supply to markets such as Vietnam" a Japanese trader said.
Scrapyards in key suppliers United States and Japan have been increasingly hesitant to offload materials on account of the rising prices, and expectations that prices will continue to increase in the near term.
Offers for bulk Japanese H2 cargoes were heard at $470-480 per tonne cfr Vietnam this week, up by $20 per tonne from $450-460 per tonne cfr Vietnam last week.
There was talk in the market of a transaction at $460 per tonne cfr Vietnam, but sources said this was below market levels and could be a seller who was eager to offload a cargo after seeing steep price falls in the Chinese steel market.
Sellers said Japanese scrapyards could accept $465-470 per tonne cfr Vietnam in the earlier part of the week, but that prices had increased toward the end of the week.
"The domestic markets in Japan are very strong, especially in the Kanto region. Scrapyards are in no hurry to sell cargoes in the export markets," a Japanese trader told Fastmarkets on Thursday.
Sellers are looking to shift more volumes into the domestic markets due to the higher margins which can be found there, especially with major Japanese mini-mill Tokyo Steel increasing its scrap purchase prices again this week.
It has raised them 10 times in 24 days amid tight domestic supply and a booming steel market in Japan.
The steelmaker increased its purchase price by ¥2,000 ($19.32) per tonne to ¥43,000 per tonne at Utsunomiya steel works.
It is now paying ¥43,500-44,500 per tonne at Tahara steel works, ¥43,500 per tonne at Okayama steel works, ¥41,000 per tonne at its Kyushu and Takamatsu steel works.
Buyers said bulk Japanese HS had been offered to them at $490 per tonne cfr Vietnam in the earlier part of the week, although Japanese scrapyards said they were targeting sales at $500-510 per tonne cfr Vietnam.
Offers later fell to $475 per tonne cfr Vietnam by Thursday, buyers said.
Fastmarkets’ weekly price assessment for steel scrap H2, Japan-origin import, cfr Vietnam was $465-470 per tonne on Thursday, up by $15 per tonne from $450-455 per tonne cfr Vietnam on December 18.
Bulk shipments of HMS 1&2 (80:20) from the United States' West Coast were offered at $500-505 per tonne cfr Vietnam, up by $35-40 per tonne from last week. Bids were at $480 per tonne cfr Vietnam.
Market activity for these cargoes have been thin in the past week. Buyers said they have high inventory levels and therefore would prefer to purchase Japanese scrap instead of bulk cargoes with long shipping time.
Fastmarkets’ weekly price assessment for deep-sea bulk cargoes of steel scrap, HMS 1&2 (80:20), cfr Vietnam was $480-500 per tonne on Thursday, increasing by $20-30 per tonne from $460-470 per tonne on December 18.
The new coronavirus strain found in the United Kingdom has raised fears of scrap supply shortages which could feed the runaway prices in Asia, market sources told Fastmarkets in the week to Thursday December 24.