Japanese ferrous scrap export prices have started increasing tracking Turkish scrap import prices, traders said.
S&P Global Platts assessed the H2 scrap export price at Yen 25,500-26,000/mt ($223-$227/mt) FOB Tokyo Bay Wednesday. The implied midpoint of Yen 25,750/mt FOB was up Yen 1,000/mt from last week's midpoint.
South Korea's leading electric arc furnace mill Hyundai Steel placed its bid at Yen 25,500/mt FOB for H2 material and Yen 29,500/mt FOB for Shindachi material on Tuesday, both up Yen 1,000/mt from the latest bid on February 3, traders said. The South Korean mill booked a total of around 10,000 mt at the latest bid, a source close to the company said.
A Tokyo-based trader said Japanese traders are currently targeting a minimum of Yen 27,000/mt FOB for H2 material, up Yen 1,000-1,500/mt from a week earlier. "We think scrap export prices have bottomed out, and Japanese scrap export prices will take on a bullish tone," he said. "As such, we don't want to offer now but wait until the prices become higher," he added.
Vietnamese mills have started contacting Japanese traders, and a Vietnamese mill is heard to have booked Japanese H2 at $262/mt CFR late last week, equivalent to around Yen 26,200/mt FOB. Another scrap trader in Tokyo said it is higher than South Korean mills' bids. "But we expect prices to go higher, no one want to sell at this price anymore," he said.
The second Tokyo-based scrap trader said Japanese scrap distributors have rushed to deliver their scrap in previous weeks to sell before prices fell and have lower stocks. As a result deliveries to domestic mini-mills or for export have become slowed. "We are paying higher prices to collect scrap to be exported, so our export contract should be higher," he said.
Japanese traders are currently paying Yen 25,000-25,500/mt FAS to collect H2 material to be exported from eastern Japan, up Yen 1,000 on the week.
Japan's leading mini-mill, Tokyo Steel Manufacturing last cut its scrap buying prices by Yen 500 at its Utsunomiya works, north of Tokyo and the company is paying Yen 27,000/mt for H2 truck delivered to Utsunomiya. "Most of mini-mills still have stock, but we will have to pay higher prices when we consume our stock," a mini-mill procurement official in Kanto said.
The heavy melting scrap market in East Asia has remained quiet as regional mills are remaining cautious to gage further 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.
The most recent HMS booking was made by China's Shagang Steel around February 3 for a total of four cargoes at $270/mt CFR for HMS and $280/mt CFR for shredded, trading sources in East Asia said.
Currently, offer prices for bulk HMS are around $280/mt CFR South Korea and around $280-$285/mt CFR Vietnam, sources said. While South Korean mills are holding off their bids, Vietnamese mills are eying to book at around $265-$275/mt CFR, they added.
Mills in South Korea and Vietnam already secured sufficient scrap inventories until March because of uncertainty about market direction, sources said.
Currently, the total scrap inventories of South Korean EAFs are over 1 million mt, around 200,000 mt higher than at around the end of last year, according to South Korean traders.
"Vietnamese mills have secured enough scrap until March production from the local market, and they are looking for bookings for April production" a Vietnamese trader said.
On Wednesday, Platts raised its East Asian bulk HMS I/II 80:20 scrap assessment to $270-$275/mt CFR. The implied midpoint of $272.50/mt CFR was up $12.50 from the previous week's midpoint.
