Japanese ferrous scrap prices continued to soften during the week, in line with the recent plunge in global scrap markets, with Japanese scrap dealers rushing to deliver to mills in anticipation of further falls, industry sources in Tokyo said.
Platts assessed its weekly H2 scrap price at Yen 20,000-21,000/mt ($182-191/mt) FOB Tokyo Bay Wednesday, down Yen 3,000/mt from last week's assessment of Yen 23,000-24,000/mt FOB.
Japanese traders are currently offering H2 grade at around Yen 20,000- 21,000/mt FOB.
"The market is now confusing because of the wide range of offer prices this week," a Seoul-based trader said Wednesday.
Other sources agreed that it was difficult to be precise about the current market price, with some buyers holding back because they think prices will decrease further.
"As our orders for June shipments are already confirmed, we still have some time to see how the market moves and can delay our procurement for July shipment," a South Korean mill manager said.
Leading South Korean EAF mill Hyundai Steel is currently in the process of collecting scrap offers from Japanese traders and is expected to send its bid to the market Thursday, trading sources in Tokyo and Seoul said.
There was consensus that the mill would lower its bid price from the Yen 23,000/mt FOB in its previous purchase on May 19.
The South Korean mill, which secured around 30,000-40,000 mt of Japanese scrap in that purchase, has lowered its bid by a total of Yen 6,500/mt over the course of two purchases since May 13.
Tokyo Steel Manufacturing, Japan's leading mini-mill, decided Wednesday to cut its scrap buying prices by Yen 1,000-1,500/mt for all grades for all works and a steel service center effective from Thursday arrivals.
This is the company's fourth cut since May 20 and takes the total decrease in its scrap buying price to Yen 4,500-7,500/mt, depending on location.
The company's purchase price for H2 material trucked to its Utsunomiya works, north of Tokyo is now at Yen 18,500/mt.
Japanese traders are currently paying scrap collectors in Japan around Yen 18,500/mt FAS for their H2 material for export through Tokyo Bay ports, Yen 4,000-4,500/mt lower from a week ago.
In Korea, domestic scrap prices are currently prevailing at Won 280,000- 290,000/mt ($237/mt-$245/mt), Korean mill sources said. "We are looking to further decrease our domestic scrap prices," a Korean procurement manager said.
Meanwhile, the market for heavy melting scrap imports in East Asia was similarly weak. Many market participants said they have not heard of any recent offers or bids but they were generally bearish.
The continued downtrend in Chinese billet and finished steel continued to dampen market sentiment for scrap, they said.
A Vietnamese mill was heard to bid for around 10,000 mt of Australian-origin HMS I/II 80:20 at $250/mt CFR at the end of last week, Vietnamese trading sources said.
Buyers are now bidding bulk 80:20 at $245/mt CFR Vietnam, a source with an Australian supplier said Wednesday. He heard that an offer at $260/mt CFR Vietnam was not accepted last week because prices are dropping.
Regional trading sources said a bulk HMS 80:20 price at $250/mt CFR would be equivalent to the last Korean booking price of Japanese H2 scrap after factoring in the usual $15/mt premium for bulk 80:20 over H2.
With scrap prices falling, scrap collectors will increasingly be unwilling to offer scrap, a Malaysian mill manager said. His mill was not keen to import scrap at this time, preferring to purchase local scrap.
"I think it is hard to say any price at the moment as it is changing daily, downwards," a trader in Vietnam said.
A trader in Taiwan said it was difficult to put a number on the support level for scrap. He pointed out that Chinese billet prices were still falling.
On Wednesday, Platts assessed East Asian bulk HMS I/II 80:20 scrap at $245-255/mt CFR, lower from than the previous week's $260-280/mt CFR.
The implied midpoint of $250/mt CFR was $20/mt lower than the week before.
