Japanese scrap exports continue to climb on strong Korean demand
Japanese scrap exports continue to soar amid strong demand from South Korean mini-mills.
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Scrap exports totalled 882,000 tonnes in April, rising by 23.4% on the year and up by 2% from the preceding month, according to statistics released by Japan’s Ministry of Finance.
In particular, exports to South Korea surged by 38.2% from year-earlier levels to 549,000 tonnes as mini-mills took advantage of the strength of the Korean Won against the yen to boost purchases of cheap Japanese scrap.
The latest figures mean that in the first four months of 2013, the country’s scrap exports amounted to 3.32 million tonnes, an increase of 24.7% from the corresponding period a year earlier.
It also puts exports close to 10 million tonnes on an annualised basis, its highest level in at least a decade and beating 2009’s record of 9.39 million tonnes.
Traders say that although domestic blast furnace operators are ramping up their scrap use, Korean mini-mills are likely to continue to be heavy buyers of Japanese scrap as long as the yen continues to remain weak.
Moreover, although scrap consumption by Japan’s blast furnace operators hit its highest level in six months in March at 847,000 tonnes, it is far below the levels of 1-1.2 million tpm seen in 2010-2011.
Additionally, the scrap ratio for converter feed still remains at a historically low level of under 11%.