Japanese ferrous scrap export prices are continuing to increase following rising overseas scrap prices, trading sources in Tokyo and Seoul said.
S&P Global Platts assessed the H2 scrap export price at Yen 28,500-29,000/mt ($251-256/mt) FOB Tokyo Bay Wednesday. The implied midpoint of Yen 28,750/mt FOB was up Yen 3,000/mt from last week's midpoint.
South Korea's leading EAF Hyundai Steel skipped placing its bid on February 17. But sources in Tokyo said the company held private negotiations and booked some H2 material at Yen 28,000-28,500/mt FOB early this week. It is Yen 2,500-3,000/mt higher than the last bid by the company on February 14.
The South Korean mill is currently postponing opening a tender in order to further observe the market, a Seoul-based trading source said.
On Friday, Daehan Steel booked 10,000 mt of Japanese H2 material at Yen 28,000/mt FOB and slightly more than 10,000 mt at Yen 28,500/mt FOB, a source close to the company said.
Another South Korean mill also submitted its bid at Yen 28,000/mt FOB. But the volume is limited due to resistance from sellers, Platts was told.
"The amount of offers from Japanese traders is very limited due to their expectation of higher prices going forward," a South Korean trading source said.
But a Tokyo-based scrap trader said prices were rising rapidly and it was aiming for even higher prices.
"We cannot accept any more Yen 28,000/mt FOB, some traders may accept Yen 28,500/mt but not many," he said, adding that some other traders has already started targeting Yen 29,000-29,500/mt FOB for H2 export.
A Vietnamese mill was heard to have booked Japanese H2 at $273/mt CFR last week, up $11/mt from the latest booking a week earlier.
"We basically don't want to offer now because prices are rising. But if we offer to Vietnamese customers, it will be around $290/mt CFR," another scrap trader in Tokyo said.
He said the offer for Taiwanese customers will be around $280/mt CFR, both equivalent to around Yen 28,970/mt FOB.
In Japan, Japanese traders are currently paying around Yen 26,500/mt FAS for H2 material to be exported from eastern Japan, up Yen 1,000-1,500/mt from a week ago.
Japanese leading mini-mill, Tokyo Steel Manufacturing has lifted its scrap buying prices by Yen 500-1,500/mt effective from February 22 arrivals, in the first increase since January 11. The H2 buying price at its Utsunomiya works, north of Tokyo has become Yen 27,500/mt.
Other domestic mini-mills already started raising their scrap buying prices from late last week, reflecting slower deliveries by distributors holding their scrap in anticipation of higher prices.
The heavy melting scrap market in East Asia has remained quiet as regional mills in South Korea and Vietnam already secured sufficient scrap inventories until April or even May for some mills, 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 rapidly increasing global scrap prices, they said.
"Global scrap prices are increasing very quickly, and we are currently holding off any bookings to further observe the market movements," a South Korean trading source said.
The latest HMS booking was made by China's Shagang Steel around February 3 for a total of four cargoes at $270/mt CFR for HMS I/II 80:20 and $280/mt CFR for shredded.
A South Korean trader heard that one Vietnamese mill booked bulk scrap at $290/mt CFR Vietnam late last week, but no further information has been confirmed.
Currently, offer prices for bulk HMS have soared to around $295-$305/mt CFR to East Asians mills, up from around $280/mt CFR South Korea and around $280-$285/mt CFR Vietnam last week, sources said. Whereas, regional mills are currently eyeing to book at around $275-$280/mt CFR, Platts was told.
Regional mills in South Korea and Vietnam said they were not receiving many offers for bulk HMS assuming that suppliers expect prices to increase.
"Bulk HMS suppliers are already sold out until April shipments," a Seoul-based trader said. "It is still too early for May bookings as the current market is volatile."
"As such, suppliers will try to wait a bit more to get a better grasp of the market movement," the source added.
Situations for regional mills are not much different from those of suppliers, Platts was told.
"Mills in Vietnam already secured enough inventories until April production via relatively cheaper domestic scrap market," a source from a Vietnamese mill said. "Some mills even secured enough until May production."
Total scrap inventories of South Korean EAFs have continued increasing to around 1.141 million mt, similar to last year's peak of around 1.145 million mt, trading sources said.
On Wednesday, Platts raised its East Asian bulk HMS I/II 80:20 scrap assessment to $285-$290/mt CFR. The implied midpoint of $287.50/mt CFR was up $15 from the previous week's midpoint.
