JAPAN STEEL SCRAP: Greater interest from Korea, Taiwan buoys export prices
Renewed buying interest from consumers in South Korea and Taiwan has allowed another increase in Japanese export scrap prices over the past week, market participants told Fastmarkets on Wednesday December 16.
Prices had already surged last week on the back of a leap in December’s Kanto steel scrap auction and robust domestic buy prices, but greater demand from key Asian buyers allowed another jump in prices this week.
Japanese H1:H2 (50:50) was heard sold at $440 per tonne cfr Taiwan this week, which sources said is equivalent to ¥42,500-43,000 ($409-414) per tonne fob.
A South Korean steelmaker purchased around 60,000 tonnes of Japanese scrap on Friday of last week, with 20,000 tonnes of H2 closed at ¥40,000 per tonne fob, while another Korean steelmaker purchased H2 at a similar price.
Offers for H2 were heard ranging ¥42,000-43,500 per tonne fob this week.
Fastmarkets’ price assessment for steel scrap H2, export, fob main port Japan was ¥40,000-42,000 per tonne on Wednesday December 16, up by ¥4,000-4,500 per tonne from ¥36,500-37,500 per tonne a week earlier.
Market participants believe offer prices will continue to increase for H2.
“I think the next target of exporters will be ¥43,000 per tonne fob for H2. I think some shippers may consider selling some small quantities before the end of the year just to lighten their inventory levels,” a scrapyard source said.
The local market is continuing to underpin export prices in the country, an exporter source said.
“The domestic market in Japan has very high demand and toward the end of this year, it is a very strong market,” he said, adding that he expected to see prices continue to rise in the coming weeks.
He pointed to plate and structural (P&S) scrap being particularly in demand in the local market, given that this is the scrap of choice for Nippon blast furnaces (BF) and three such units - in Kimitsu, Kashima and Muroran - are restarting operations following shutdowns earlier this year.
More deals for high-grade material
There continued to be buying action in the high-grade scrap segment in Japan this week, with South Korea and Taiwan both in the market for such material.
A South Korean steel mill purchased 20,000 tonnes of Shindachi bara - a Japanese grade of busheling - at ¥44,000 per tonne fob on Friday.
A mill in Taiwan bid for Shindachi at an equivalent of ¥46,000 per tonne fob this week, while a South Korean steelmaker purchased similar material at ¥47,000 per tonne cfr South Korea, in a deal heard after this week’s assessment window closed. That price would be equivalent to around ¥45,000 per tonne fob after considering average freight costs.
Fastmarkets’ price assessment for steel scrap, Shindachi, export, fob main port Japan was ¥44,000-45,500 per tonne on Wednesday, up ¥4,500-5,500 per tonne from ¥39,500-40,000 per tonne a week earlier.
That put the premium for Shindachi over H2 at ¥3,500-4,000 per tonne, up from ¥3,000-3,500 per tonne last week.
P&S was sold to South Korea at ¥43,500 per tonne fob late last week, with offers heard at ¥45,500 per tonne fob.
Therefore, Fastmarkets’ price assessment for steel scrap, P&S export, fob main port Japan was ¥43,500-45,500 per tonne on Wednesday, up ¥4,000-4,500 per tonne from ¥39,500-41,000 per tonne.
Shredded scrap was sold to South Korea at ¥43,500 per tonne fob on Friday, while offers for the grade were heard at ¥45,000 per tonne fob.
In response, Fastmarkets’ price assessment for steel scrap, shredded, export, fob main port Japan was ¥43,500-45,000 per tonne fob on December 16, up by ¥5,500-6,000 per tonne from ¥38,000-39,000 per tonne a week earlier.