Japan’s steel scrap prices up another $5-10/t

Posted on 15 September 2020

Japan’s steel scrap prices for both exports and domestic sales stayed on the uptrend in the past two months, strengthened by another $5-10/tonne over September 7-11, mainly supported by the firm demand from Vietnam, though some buyers have stepped onto the sidelines on the continuing price rises, scrap traders in Tokyo shared.

The Japanese scrap prices had been up by a total of about $55/t since mid-July, as supply had been tight on slower generation in extremely hot summer in Japan this year as well as the bullish demand from customers in Vietnam, they elaborated.

The latest winning bid for Kanto Tetsugen’s September monthly H2 grade scrap exports on September 9, for example, was believed to be delivered to a Vietnamese mill that booked the cargoes at around $308-310/t CFR, equivalent to about Yen 30,000/t FOB, or higher than a booking by another Vietnamese mill on September 3 at $301/t CFR, traders shared.

The latest booking price from Vietnam has prompted the other buyers both in and out of Japan to lift their bidding prices by Yen 500-1,000/t in the spot market after the September 9 tender, though they are still no match to the Vietnamese price.

“It might be difficult to match, but the key now is how much longer the Vietnamese can afford to pay higher, so many others just wait and see,” a Tokyo-based scrap trader explained.

On September 10, Hyundai Steel, South Korea’s leading electric-arc-furnace producer, for example, bid the Japan-origin H2 material at Yen 28,000/t FOB, or Yen 1,000/t higher than that on August 26 and up Yen 500/t from the ordering price by South Korea’s Dongkuk Steel Mill on September 2.

“We believe Hyundai may be able to secure higher grade scrap but not H2, as their bidding price is way below the Vietnamese level,” the Tokyo trader said, adding that Hyundai bid the Shindachi material (new cut) at Yen 31,000/t FOB and HS grade at Yen 32,000/t FOB.

For the buyers in Japan, over September 7-11, the Japanese shippers at the Tokyo Bay area paid Yen 27,000-27,500/t FAS for the H2 grade scrap for exports, up from Yen 27,000/t FAS in the previous week, and the Japanese mini-mills paid Yen 26,000-28,000/t for the same grade scrap against the Yen 26,000-27,000/t in the prior week, sources confirmed.

Tokyo Steel Manufacturing, Japan’s top electric-arc-furnace producer, lifted its scrap buying prices by another Yen 500/t starting September 10 for the supplies only to its Tahara works in central Japan, paying Yen 26,000/t for the H2 materials, have caught up with the same price level for the supplies to its Utsunomiya works in north of Tokyo.

Japan will enjoy a longer weekend with public holidays on September 21-22, and the domestic mini-mills should be aggressively seeking scrap deliveries for higher output during the holiday, making the best of the lower power charges on holidays in Japan. September 21 is Japan’s Respect for the Aged Day and September 22 is the Autumnal Equinox.

However, under the present circumstances, “the Japanese mills will have no merit in producing more with such high-priced scrap, so they may not lift their output in the coming holiday after all,” a second Tokyo trader commented.

 

Written by Yoko Manabe, yoko.manabe@mysteel.com

Edited by Hongmei Li, li.hongmei@mysteel.com

Source : Mysteel Global