The Japanese ferrous scrap prices remained supported but scrap demand in South Korea and Japan was slowing down on scheduled maintenance at steel mills during the summer.
S&P Global Platts assessed H2 scrap at Yen 19,000-19,500/mt ($180-$185/mt) FOB Tokyo Bay Wednesday, up Yen 500 from the mid-point from last week's assessment at Yen 18,500-19,000/mt FOB.
South Korea's leading electric arc furnace mill, Hyundai Steel, had placed its bid for Japanese H2 material at Yen 18,000/mt FOB on Friday. However, the mini-mill was unable to confirm any bookings because the bid price was too low, trading sources in Tokyo and Seoul said. "Hyundai's bid price of Yen 18,000/mt FOB show that it had no appetite on Japanese scrap, so we cannot use that as a reference price," a Tokyo-based scrap trader said.
"Scrap bookings will become silent once Japanese traders go on summer holidays around August 11-15," a Seoul-based trader said. He said expected more active buying in South Korea next week before the Japanese holiday.
Japanese traders are currently targeting a minimum of Yen 19,500/mt FOB for H2 material export. They were holding on to their offer prices because they expected scrap demand in Vietnam to rise after the recently announced final safeguard measures on billet and long products imports.
Vietnamese customers were contacting Japanese traders this week with bids for H2 material at $220/mt CFR, $10 higher than a week earlier and it is equivalent to around Yen 19,950/mt FOB. "The bids are higher than those by South Korean mills, but Japanese traders expects that the Vietnamese will soon raise their bid prices," another Tokyo-based scrap trader said.
Japanese traders are targeting $230/mt CFR Vietnam for H2 scrap, so no deals have taken place, Vietnamese trading sources said. "I suspect that the Japanese will reduce prices a bit to try and match bids," a trader said.
In Japan, Japanese traders are currently paying Yen 18,000-18,300/mt FAS for H2 material to be exported out of eastern Japan, up about Yen 900 from a week earlier. This has also led some mini-mills around the Tokyo Bay area to lift their scrap buying prices by Yen 500-1,000/mt to secure material.
"Mini-mills have summer shut downs in July-August and scrap prices usually weaken. This time, scrap prices are being supported by expectations of higher export prices from Vietnam," the second Japanese trader said.
Japanese leading mini-mill, Tokyo Steel Manufacturing has been holding its scrap buying prices since July 9 arrivals and the company is currently paying Yen 18,000/mt for H2 material delivered to its Utsunomiya works, north of Tokyo. A Tokyo trader said that the company maintained its scrap prices because the Utsunomiya works will soon undergo its summer shutdown.
The market for imported bulk heavy melting scrap was steady during the week, trading and supplier sources in the East Asia said. A South Korean mill's booking last week reflected stable pricing.
Dongkuk Steel ordered one 35,000 mt cargo of scrap from Australia at $225/mt CFR HMS I basis. The cargo, comprised 15,000 mt of shredded scrap, 10,000 mt of Bonus grade, and the remaining 10,000 mt, HMS I and I/II 80:20 scrap, is due for September arrival.
Another South Korean bulk scrap booking, for July/August shipment previously transacted at $225/mt CFR HMS I basis on June 30.
A US supplier is heard to be in discussions to sell its mostly shredded bulk cargo to another South Korean mill, but South Korean traders could not confirm this as yet. South Korean traders have said this South Korean mill has port congestion and has in fact asked for the arrival of two US scrap cargoes to be postponed by a month, to August and September instead of July and August.
This same US supplier is heard to have sold bulk cargoes to Vietnam and Taiwan but local traders could not confirm this. Bulk scrap, at current prices, was not viable for EAF mills in Taiwan, Taiwanese trading sources said. "Taiwan is not likely take any bulk scrap cargoes because rebar prices here are low," a Taipei-based trader said Wednesday.
A bulk 23,000 mt cargo from Australia was heard sold last week to a mill in South Vietnam last week at an effective price of $228/mt CFR, a Vietnamese trader said. The cargo consisted mainly of 80:20 scrap and some shredded grade scrap. He said he had not heard of any US bulk scrap orders recently.
A supplier said that HMS scrap negotiations were taking place at $225/mt CFR South East Asia.
Platts maintained its East Asian bulk HMS I/II 80:20 scrap assessment at $225-226/mt CFR Wednesday, with an implied midpoint of $225.50/mt.
