Prices for Japanese scrap have been corrected down this week and, with the latest Kanto tender and decline in Tokyo Steel’s purchase prices, market sources have started to believe that prices may be close to the bottom.
In Taiwan’s import market, offers for ex-US HMS I/II (80:20) scrap in containers have fallen to $345-350/mt CFR by the end of the week, losing $10-18/mt since last Friday. A deal was done at $350/mt CFR, but early this week, signaling about a $5/mt decline over the past week.
Ex-Japan offers for H1/2 (50:50) scrap by bulk to Taiwan have dropped by $5-10/mt to $365/mt CFR and the latest deal was done at $360/mt CFR, versus $368/mt CFR last week for this grade. In general, together with the slowdown in demand, Japanese suppliers have become cautious. “The market thinks this is the bottom and is reluctant to offer,” an importer said.
In the current week, major Taiwanese producer Feng Hsin’s rebar prices have remained at TWD 18,800/mt ($599/mt) ex-works. “Feng Hsin and other Taiwanese mills have very limited deals this week, as the market has no confidence due to fragile iron ore and scrap prices,” a local source said.
The other market which shows at least some demand for import scrap has been Vietnam. Despite rumors about Kanto tender material going to South Korea, a few sources are confident that that the 5,000 mt is for the Vietnamese market with the price translating to $380-385/mt CFR. This level has been heard in bids since late last week and it is possible that levels $5/mt lower may be fixed in some further deals. “This time Bangladesh’s bid was not attractive enough. Demand is scarce in Asia,” a Japanese seller said, adding that South Korean mills are not in the import market this week at all. Instead, they have focused on local scrap purchases with the major mills like Hyundai Steel announcing a KRW 10,000/mt decline in purchase prices this week.
SteelOrbis’ reference price for ex-Japan H2 scrap stands at JPY 48,500-51,100/mt ($328-345/mt) FOB by the end of the week, where the higher end of the range has lost JPY 2,400/mt or $19/mt since last week, while the lower end has declined by JPY 500/mt or by $5/mt.