The East Asian market for imported bulk heavy melting scrap strengthened on buying in Vietnam, regional trading sources said Wednesday. Elsewhere, many regional EAF mills continued to stay on the sidelines with buying interest for bulk scrap weak.
S&P Global Platts raised its East Asian bulk HMS I/II 80:20 scrap assessment $230-$237/mt CFR Wednesday, up from the previous week's assessment of $225-$230/mt CFR. The implied midpoint of $233.5/mt was up $6/mt from the previous week's midpoint of $227.50/mt.
Buying sentiment is good in Vietnam because safeguard measures on billet imports have effectively blocked imports, spurring domestic mills in Vietnam to ramp up their melting capacities. Some traders reported hearing bulk scrap orders in Vietnam last week.
A Vietnamese mill booked a 25,000 mt cargo from Australia last Friday at $237/mt CFR for HMS I/II 80:20 grade and at $242/mt CFR for shredded grade scrap, a trader in Hanoi said.
While Vietnamese mills are seeking scrap for October steel production, "they are not in a hurry" to make bookings. "The market is unstable and nobody knows where the steel market will be in October," he said. Suppliers are now offering bulk 80:20 at $245-$250/mt CFR Vietnam, he said.
A regional trader said he heard that a US supplier sold a bulk 25,000 mt composite scrap cargo and he estimated that the booking price was at $235-$237/mt CFR Vietnam last week.
New offers from West Coast US suppliers are prevailing at around $240/mt CFR East Asia, up from $235-$240/mt CFR the week before, a Taipei-based trader said.
An Australian supplier said that he was hearing bulk HMS prices prevailing in the region at around $235/mt CFR.
A Malaysian mill manager said he had "lost touch" with the bulk scrap market. He believed Malaysian mills have stopped importing large volume scrap cargoes from outside the region, possibly for more than a year. This was mainly because it was cheaper for mills to import Chinese rebar and billet than to run their meltshops fully.
Previous bookings in Vietnam concluded at $229/mt HMS I/II 80:20 basis during July 25 week.
Meanwhile, the Japanese ferrous scrap export market remained muted due to the summer holidays in Japan this week, sources in Tokyo and Seoul said Wednesday. However, they anticipate that Japanese scrap prices will resume its uptrend when trading resumes amid higher domestic demand and tighter supply for scrap.
Platts maintained its weekly H2 scrap export prices a Yen 20,000-20,500/mt ($199-204/mt) FOB Tokyo Bay Wednesday, unchanged from last week.
South Korea's leading EAF mill, Hyundai Steel, is currently collecting offers for Japanese scrap and is expected to send out its bid price on Friday, Seoul-based trading sources said. The mini-mill has kept its bid price for Japanese H2 scrap at Yen 19,500/mt FOB unchanged since July 29. Last week, Hyundai Steel did not give out its bid price preferring to skip its weekly purchase tender despite collecting offers earlier in the week.
Trading activity is expected to return at the end of this week as Japanese trading participants are expected to resume work by then. "Japanese electric arc furnace mills will soon start securing scrap to replenish their stockpile. This will boost demand and domestic scrap prices," a source said.
Another noted that the stronger yen has made Japanese scrap exports more expensive in dollar terms. Japanese traders are probably seeking higher export prices to Vietnam. These traders have been offering H2 scrap at around $235-240/mt CFR Vietnam since last week. This was equivalent to around Yen 20,750-21,210/mt FOB last week but it is currently around Yen 20,560-21,060/mt FOB due to the yen's appreciation.
Japanese traders are currently targeting around Yen 21,000/mt FOB for H2 material to be exported, unchanged from a week ago, traders in Tokyo and Seoul confirmed. They are currently paying scrap collectors Yen 19,000-19,500/mt FAS for H2 material for export, unchanged from last week.
On Wednesday Japan's leading mini-mill, Tokyo Steel Manufacturing, lifted its scrap buying prices by Yen 1,000/mt for all grades at its Utsunomiya works, north of Tokyo, effective Thursday arrivals. Its purchase price for H2 material at Utsunomiya was raised to Yen 19,000/mt.
Traders said there was no impact from the Japanese mill's scrap price hike because the company's scrap buying price at Utsunomiya was below the scrap purchase price of the other mills in the vicinity. "We can say that scrap supply-demand is now tighter and the company finally lifted prices to ensure it will have smoother scrap arrivals," a Tokyo-based trader said.
In South Korea, Hyundai Steel announced that it would increase its buying prices of domestic scrap at its Pohang and Dangjin works by Won 15,000/mt ($13.6/mt) effective August 16. Currently, Korean domestic prices for Japanese H2 equivalent grade scrap are prevailing at around Won 250,000/mt ($226/mt).
