ASIA STEEL SCRAP DIGEST: Major China, Japan mills reduce scrap buy prices

Major steelmakers in China and Japan lowered their domestic scrap buy prices on Friday August 6 amid reduced intake volumes, sources told Fastmarkets.

  • Large Chinese steelmakers drop domestic scrap purchase prices
  • Japan’s Tokyo Steel reduces buy prices for most grades at most factories
  • South Korea closes deals at lower prices for Japanese scrap.

China
Two major mills in Jiangsu province lowered their domestic scrap purchase prices by 50 yuan ($8) per tonne on August 6 amid continuing production cuts.

Jiangsu province is also battling with a resurgence in the numbers of Covid-19 infections, with the key Jiangyin port heard to be in a “soft lockdown” on Friday, which may badly affect the unloading of steel cargoes.

Fastmarkets’ weekly price assessment for steel scrap heavy scrap, domestic, delivered mill China, was 3,770-3,810 yuan ($584-590) per tonne on August 6, down by 20-50 yuan from 3,790-3,860 yuan on July 30.

Disregarding VAT, that puts the China domestic scrap price $51 per tonne below the lowest import offer price in the market at $570 per tonne cfr.

Offers from South Korea for cargoes of HRS101 scrap continued to undercut competition from Japan, with Korean sellers offering at $570-580 per tonne cfr China and Japanese suppliers at $600 per tonne cfr.

Unsurprisingly, buyers’ bids were far below this level, heard at $500-510 per tonne cfr northern China and $510-520 per tonne cfr eastern China on Friday.

“We haven’t been actively seeking offers recently. It is hard to clinch any deals when the sellers are offering much higher prices than we could accept,” a mill source in Hebei province told Fastmarkets, with a trading source in Zhejiang province agreeing.

Fastmarkets’ daily price assessment for steel scrap, heavy recycled steel materials, cfr China, which takes into account prices at ports in eastern China, was $520-530 per tonne on Friday, unchanged from a day earlier.

Japan
Key scrap buyer Tokyo Steel reduced its purchase prices for steel scrap on Friday, the second drop it has announced this week.

The mill reduced buy prices by ¥500 ($5) per tonne, except for Shindachi grades at its Tahara and Okayama works. The reductions meant that the Utsunomiya mill will pay ¥47,000 ($429) per tonne for H2-grade material from August 5.

The decision to leave the Shindachi price unchanged at Tahara and Okayama came ahead of the Obon holiday on August 13-16, during which market sources expected that Shindachi generation would become even tighter amid closures at Japanese carmakers.

South Korea
Deals were heard concluded between a major South Korean steelmaker and Japanese sellers recently at lower prices, after bids were lodged earlier in the week, market sources said.

One Japanese scrap trading source told Fastmarkets that around 100,000 tonnes of scrap was offered to the South Korean mill, with around 50,000-60,000 tonnes of that total being the lower-grade H2 material. A Taiwanese trading source believed that around 40,000 tonnes of scrap was actually traded.

Sources said that a small volume of Shindachi busheling was sold to the Korean mill at ¥64,000 per tonne fob Japan, which would work out at ¥68,500 per tonne cfr South Korea after freight costs are added.

HS was also sold to the mill at ¥58,500 per tonne fob, while shredded was sold at ¥55,000 per tonne fob and H2 at ¥45,500 per tonne fob Japan, sources said.

Fastmarkets’ weekly price assessment for steel scrap H2, Japan origin, import, cfr main port South Korea, was ¥50,000-50,500 per tonne on Friday, down by ¥1,500 per tonne from ¥51,500-52,000 per tonne last week.

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