The Japanese ferrous scrap market was little changed during the past week, Japanese and Korean trading sources said Wednesday, with the outlook uncertain because of the lack of export deals.
Platts assessed H2 scrap at Yen 19,000-Yen 20,000/mt ($180-$189/mt) FOB Tokyo Bay Wednesday, unchanged week on week.
South Korean mill Posco P&S booked Japanese HS material at Yen 22,500/mt FOB Tuesday. Japanese traders said that was equivalent to Yen 19,500-Yen 20,000/mt FOB for H2 material.
Hyundai Steel, South Korea's leading EAF mill, was, as of Wednesday, collecting scrap offers from Japanese traders. Market participants in Seoul and Tokyo expected the mill to send its bid price later this week.
Hyundai Steel did not buy Japanese H2 material last week. It last bid H2 at Yen 19,500/mt FOB on June 3, unchanged from a tender the week before.
"The price movement in the scrap market is quite uncertain at the moment.
We will have to wait and see what Hyundai will bid later this week," a Seoul-based trader said Wednesday.
Japanese traders are targeting exports of H2 material at around Yen 20,500/mt FOB as they are paying domestic scrap collectors around Yen 19,000-Yen 19,300/mt FAS for H2 material to be exported out of eastern Japan, both unchanged from a week ago.
Japanese scrap exports to other regional countries have been quiet.
Some Vietnamese customers have expressed interest for H2 material at $205/mt CFR, unchanged from a week ago. That was equivalent to Yen 18,550/mt FOB.
"We cannot accept such low prices," a Tokyo-based scrap trader said of his lack of bookings to Vietnam.
Offers for H2 were at $220-225/mt CFR Vietnam, a Vietnamese trader said.
"Nobody believes that the Japanese scrap suppliers can make the higher prices stick," he said. This is because offers for July shipment are still available."
In Japan, leading mini-mill Tokyo Steel Manufacturing lifted its scrap buying price by Yen 500/mt at its Utsunomiya works north of Tokyo effective Wednesday arrivals. Its H2 buying price at its Utsunomiya works was raised to Yen 19,000/mt.
Japanese trading sources attributed the price increase as an upward correction given other mills in the area were paying higher prices.
"We do not think the company will keep lifting its scrap prices," another trading source in Tokyo said.
In South Korea, Hyundai Steel and other steelmakers said Tuesday they will lower their scrap purchase prices of Won 10,000/mt ($8.5/mt) effective around Friday.
The current price for Korean H2 equivalent-grade scrap was prevailing at Won 230,000/mt-Won 240,000/mt ($195-204/mt), a Seoul-based procurement manager said.
Meanwhile, the bulk HMS I/II scrap market in East Asia was quiet this week after South Korea's Hyundai Steel last Thursday booked two HMS I/II 80:20 bulk cargoes from a West Coast US supplier at $233/mt CFR HMS I basis.
On Wednesday, the mill was also heard to have booked a 35,000-40,000 mt cargo of Russian A3 bulk scrap at $219/mt CFR for July arrival. The cargo was ordered in early June, Korean trading sources said.
Platts assessed East Asian bulk HMS I/II 80:20 scrap Wednesday at $230-235/mt CFR, higher than last week's $220-230/mt CFR. The implied mid-point of $232.50/mt CFR was $7.50/mt higher than the week before.
A Taiwanese trader said the bulk scrap market was quiet but had bottomed out. "The market is not decreasing. It is more likely to be increasing," he said.
But some market participants in Southeast Asia said continued weakness in Chinese billet and bar prices continued to weigh on market sentiment for scrap, adding Hyundai's booking price of $233/mt CFR was high.
Southeast Asian mills will not pay current scrap prices, a Malaysian mill manager said. While US suppliers were unwilling to give bulk scrap offers now, he said bulk scrap prices can fall. Regional mills will just buy Chinese steel instead of melting scrap if Chinese steel prices remained at current weak levels, he said
"I think the scrap market is more likely to go down than go up," the Vietnamese trader said. "People are watching what the Chinese are doing with their billet and rebar," he said, adding Vietnamese buyers were aiming to book bulk 80:20 at $220/mt CFR but not many suppliers wanted to sell at that level.
"There is a bit of a stand-off right now," he said.
"Scrap offer prices have gone up on the strength of Turkish bookings," a regional trader said, adding it was difficult to gauge where the regional scrap market was.
