Japanese ferrous scrap prices have fallen over the past week due to slower scrap loading onto vessels for export, traders said Wednesday.
S&P Global Platts assessed Japanese H2 grade ferrous scrap export prices at Yen 27,000/mt ($248/mt) FOB Tokyo Bay Wednesday, down Yen 250 from the midpoint of the previous week's assessment of Yen 27,000-27,500/mt FOB.
South Korea's Dongkuk Steel Mill booked around 20,000 mt of Japanese H2 Wednesday at Yen 27,000/mt (Yen 29,500/mt CFR), a source close to the company said.
Last Friday, South Korea's leading electric arc furnace mill, Hyundai Steel, placed its bid at Yen 27,000/mt FOB for H2 on Friday and Yen 30,000/mt FOB for Shindachi, both unchanged from its bids on April 10, traders said. Hyundai has booked a total of around 50,000 mt after receiving around 100,000 mt of offer volume, they added.
A Tokyo-based scrap trader said Japanese domestic prices had fallen and more traders could lower their offer prices, which enabled the South Korean mills to secure a high volume.
"Given the current price level to collect scrap for exports, Yen 27,000/mt FOB for H2 is the minimum level," he said, adding there was a possibility of offering at lower prices if Japanese domestic prices fell further.
Japanese traders are paying around Yen 25,500-26,000/mt FAS to collect H2 material to be exported from eastern Japan, down Yen 1,000 from a week earlier.
Japan's leading mini-mill Tokyo Steel Manufacturing has cut its scrap buying prices three times so far in April by a total of Yen 1,500/mt.
The company is currently paying Yen 29,500/mt for H2 material truck delivered to its Utsunomiya works, north of Tokyo.
Another scrap trader in Tokyo said overall domestic scrap prices have fallen, but many mini-mills are still paying higher prices than those for exports.
"These mills are still trying to accumulate scrap stock for increased holiday production (Golden week holidays in April 29-May 7), so that the balance between domestic supply and demand will remain tight for a while," he said. He added that Japanese integrated mills were aiming to increase scrap use, which was another element of the tighteners.
A Vietnamese mill was heard to have booked 10,000 mt of Japanese H2 material at $278/mt CFR at late last week for late-May shipment. It was $2/mt lower than their target price last week.
The second Tokyo-based scrap trader said this was equivalent to around Yen 27,200/mt FOB at the exchange rate late last week, but Japanese traders wouldn't be able to accept $278/mt CFR anymore because the yen had strengthened.
The East Asian bulk heavy melting scrap import market remained extremely quiet during the week because regional mills are hesitant to make long-distance bookings due to falling global scrap prices, sources in South Korea and Vietnam said.
"No mills are currently interested in deep-sea bookings due to the longer delivery time as prices are continuing to fall," a Seoul-based trader said. "Currently, offer prices don't even mean much as no mills are interested in buying," another South Korean trader said.
Traders in South Korea said mills were only looking for shorter-distance bookings from Japan and Russia as they waited for the market to find direction.
Meanwhile, both Hyundai Steel and Dongkuk Steel Mill booked Russian A3 grade scrap at $273/mt CFR South Korea last Friday, down $6 from Dongkuk's last booking in late March, traders said. The booking volumes are around 30,000 and 15,000 mt respectively, sources said.
Similarly in Vietnam, mills were waiting for clear market direction and were only collecting offers from Japan, sources said.
Traders in Vietnam said mills are afraid of making any deep-sea bookings as Chinese steel prices continued to fall. Mills were being cautious, expecting prices to fall further, they added.
Currently, regional mills, including South Korean ones, are eying around $260/mt CFR or even less for bulk HMS I/II 80:20 while receiving no offers at all. Last week, offer prices were around $285/mt CFR or more.
Previously, South Korea's Dongkuk Steel Mill purchased one US deep-sea cargo of 32,000 mt at $280/mt CFR for HMS I/II 80:20 and $285/mt CFR for shredded on March 24 for May arrival.
In parallel, one Vietnamese mill booked one US bulk HMS I/II 80:20 cargo for May shipment at $285/mt CFR Vietnam around March 27.
On Wednesday, Platts lowered its East Asian bulk HMS I/II 80:20 ferrous scrap assessment to $265-$275/mt CFR from $280-$285/mt CFR a week earlier. The implied midpoint of $270/mt CFR is $12.50/mt lower.
