Japanese ferrous scrap prices have fallen further over the week on declining overseas scrap prices, trading sources in Tokyo said.
S&P Global Platts assessed the H2 scrap export price at Yen 24,500-25,000/mt ($218-222/mt) FOB Tokyo Bay Wednesday. The implied midpoint of Yen 24,750/mt FOB was down Yen 500/mt from last week's midpoint.
South Korea's leading EAF mill Hyundai Steel placed its bid at Yen 24,500/mt FOB for H2 material and yen 28,500/mt FOB for Shindachi material on Friday. Both were Yen 500/mt lower from the latest bid on January 25, trading sources in Seoul and Tokyo said.
The South Korean mill booked around a total of 10,000-15,000 mt in the latest bids, they said.
On the same day, South Korea's Dongkuk Steel Mill placed its bid at Yen 27,000/mt CFR, equivalent to Yen 24,500-25,000/mt FOB given the freight cost of 2,000-2,500/mt depending on region.
South Korean mills are waiting until the Kanto Tetsugen monthly auction scheduled for Thursday to gauge the the market before starting to collecting offers, sources close to the mills said.
A Tokyo-based scrap trader said other South Korean mills are also eying Yen 24,500/mt FOB for H2 material, but it is too low for Japanese traders to accept because traders are currently paying Yen 24,500-25,000/mt FAS to collect H2 material to be exported from eastern Japan.
"We heard Hyundai has secured total 10,000-15,000 mt with the latest tender, but most are believed Shindachi and very limited volume of H2 material was secured," he said.
He added that South Korean mills will have to add something extra to secure sufficient volume of H2.
Japanese traders are currently targeting Yen 25,500-26,000/mt FOB for H2 export, down from Yen 26,000/mt FOB a week ago.
No enquiries were received from Vietnamese customers, but Taiwanese mills have started contacting Japanese traders and looking to book H2 material at around $250/mt CFR.
Another scrap trader in Tokyo said $250/mt CFR is equivalent to Yen 25,000/mt FOB, slightly higher or the same level with the bid by South Korean mills. "But no contract was confirmed, traders want to wait and see the market movement because Turkey scrap prices have increased earlier this week," he said.
In Japan, Tokyo Steel Manufacturing has cut its scrap buying prices by Yen 500/mt for all grades but only at Utsunomiya works, north of Tokyo, effective from Wednesday arrivals -- the first price cut since July 9.
The company is paying Yen 27,000/mt for H2 material truck-delivered to Utsunomiya. "Prices at Utsunomiya have been relatively higher than other mini-mills around, so the company has adjusted prices lower," a Tokyo-based scrap distributor said.
The heavy melting scrap market in East Asia has remained quiet as regional mills are still being cautious about recent price movements, regional trading sources said.
Regional mills including South Korea and Vietnam are still waiting to further observe price movements before making any bookings due to fluctuating global scrap prices, they said.
"For South Korean mills, new deep sea bookings will be for April shipment," a Seoul-based source said.
Vietnamese mills also have secured sufficient inventories until February production and are expected to become more active in purchasing scrap for March production, Vietnamese trading sources said.
Around the Lunar New Year holiday season last week, offer prices for US deep sea cargoes were mainly around $270/mt CFR South Korea, sources said.
Vietnamese mills are also waiting for the results of the Japanese Kanto Tetsugen auction to get a better picture of the market, a source from a Vietnamese mill said.
South Korean mills are currently targeting around $250-260/mt CFR for US deep sea cargoes, Seoul-based trading sources said.
Late last week, South Korea's Hyundai Steel and Dongkuk Steel mill booked Russian A3 grade scrap at $249/mt CFR and $253/mt CFR respectively.
Hyundai's latest HMS booking was made on January 19 for 40,000 mt of US deep sea cargo at $279/mt CFR South Korea on a HMS I basis for March arrival.
"Given the Turkish scrap prices slightly rebounded, it will be inevitable for Asian mills to also increase their prices for HMS," a Seoul-based source said.
Platts assessed Turkish heavy melting scrap I/II 80:20 at $248/mt on Tuesday, up $7.50/mt from Monday.
On Wednesday, Platts raised its East Asian bulk HMS I/II 80:20 scrap assessment to $255-265/mt CFR. The implied midpoint of $260/mt CFR was up $7.50 from the previous week's midpoint.
