Japanese scrap export prices increased during the week, supported by a weaker Japanese yen and anticipation of prices rising further, trading sources in Tokyo said Wednesday.
S&P Global Platts assessed the H2 scrap export price at Yen 27,500- 28,000/mt ($234-238/mt) FOB Tokyo Bay Wednesday, with the implied midpoint of Yen 27,750/mt FOB up Yen 500/mt from the previous week's midpoint.
South Korea's Dongkuk Steel placed its bid early this week at Yen 30,500/mt CFR for H2 material, equivalent to Yen 28,000/mt FOB, up Yen 1,000/mt from the company's most recent booking late last week, traders in Tokyo and Seoul said.
South Korea's leading mini-mill Hyundai Steel booked Japanese H2 at Yen 27,500/mt FOB late last week via private negotiations. The South Korean mill also plans to only carry out private negotiations this week, a source close to Hyundai said.
Japanese traders said they thought Yen 27,500/mt FOB was the prevailing price late last week but that it should now be higher, although other South Korean mills remain willing to pay Yen 27,500/mt FOB or just a little bit higher, Seoul-based trading sources said.
A Taiwanese mill booked Japanese H2 material late last week at $265/mt CFR for 3,000-5,000 mt for January shipment, which is equivalent to around Yen 28,000/mt FOB, trading sources in Tokyo said.
No bookings by Vietnamese customers were confirmed during the week, but trading sources in Tokyo said Vietnamese customers are looking to book H2 material at around $270-275/mt CFR, unchanged from last week. The dominant US price was unchanged but it increased in yen terms as the Japanese currency weakened, from Yen 115 to the dollar a week ago to around Yen 117-118 Wednesday.
"We expect Japanese scrap prices to become higher, so offers by Japanese traders must be still limited," a Tokyo-based scrap trader said.
Japanese traders are currently targeting around Yen 28,500-29,000/mt FOB for H2 export, up Yen 500-1,000/mt from a week ago.
In Japan, leading mini-mill Tokyo Steel Manufacturing lifted its scrap buying prices twice over the course of last week, first by Yen 1,000-1,500/mt and then by Yen 500-1,000/mt effective from December 22 arrivals for all grades at all works and a steel center.
From Thursday, the company will pay Yen 27,500/mt truck delivered to its Utsunomiya works, north of Tokyo.
Trading sources in Tokyo said other mini-mills have made similar increases, and they expect others will again follow Tokyo Steel Manufacturing's move.
"Japanese mini-mills are lifting their output to prepare for shutdown for Year-end and New Year holidays, so their appetite on scrap is higher," another scrap trader in Tokyo said. Japanese traders are currently paying Yen 26,000-26,500/mt FAS to collect H2 material to be exported from eastern Japan, up Yen 1,000/mt on the week.
Meanwhile, the bulk heavy melting scrap market in East Asia also increased while remaining quiet. Regional steel mills especially Vietnam are currently holding off their bookings to observe the market movement, sources said.
Early this week, South Korea's Hyundai Steel booked one US deepsea cargo of around 42,000 mt at $283/mt CFR on HMS I basis for February arrival, Seoul-based trading sources said.
In Vietnam, mills are offered $295/mt CFR for US deep sea cargoes early this week but no bookings were made, a Vietnamese trading source said. "Currently, scrap demand is not strong in Vietnam as many mills already secured sufficient scrap inventories until February, so they can wait a bit longer," another Vietnamese trader said.
On Wednesday, Platts raised its East Asian bulk HMS I/II 80:20 scrap assessment price to $280-290/mt CFR from the previous week of $272-274/mt CFR. The implied midpoint is $12 higher on week.
