Japanese scrap export prices remained strong over the week, and prices are expected to rise further after Japanese suppliers return from holidays, sources in Tokyo said.
S&P Global Platts assessed Japanese H2 grade ferrous scrap export prices at Yen 31,500/mt ($284/mt) FOB Tokyo Bay Wednesday, up Yen 500/mt from a week ago.
The latest booking of Japanese H2 grade scrap was made by South Korea's leading electric arc furnace mill, Hyundai Steel at Yen 31,000/mt FOB on August 8. Hyundai is believed to have secured around 20,000-30,000 mt of Japanese scrap including other grades through its tender. No other bookings were made by South Korean mills.
A Tokyo-based scrap trader said the winning bids from the Kanto Tetsugen tender on August 9, a day after Hyundai's tender, were higher, which encouraged Japanese suppliers to raise their offer prices.
The highest bid in the Kanto Tetsugen tender was Yen 31,610/mt FAS, up Yen 3,500/mt from last month's highest bid, and it is equivalent to around Yen 32,400-32,600/mt FOB.
Traders are currently targeting around Yen 32,000-32,500/mt FOB for H2 export, up Yen 1,000-1,500/mt from a week ago. "No more Yen 31,000/mt FOB orders can be accepted," the Tokyo-based trader said.
"Business activities this week in Japan has been slow due to holidays," another Tokyo-based trader said. "Actual business will be back to normal from late this week or next week when most return from their holidays by around August 16," he added, saying export offer prices would increase further.
Offer prices from Japanese traders for H2 material to Vietnamese customers are currently around $325-$330/mt CFR for 5,000 mt parcel, up $15-$20/mt week on week and those for Taiwanese customers are around $315-$320/mt CFR, up $10-$15/mt from a week ago, trading sources in Tokyo and Nagoya said.
The latest booking for H2 material was $304/mt CFR for 10,000 mt during the week of August 1 for a Vietnamese mill and at $280/mt CFR for H1/H2 50:50 around July 25 for a Taiwanese mill.
In Japan, traders are currently paying around Yen 30,000-30,500/mt FAS to collect H2 material to be exported from eastern Japan, up Yen 1,500/mt from a week ago.
Japan's leading mini-mill, Tokyo Steel Manufacturing, lifted its scrap buying prices Yen 2,000/mt effective from August 10 arrivals for all works and its steel center. H2 buying price delivered to its Utsunomiya works, north of Tokyo, is Yen 30,000/mt.
The Asian bulk heavy melting scrap market jumped after one bulk booking made from Australia to Turkey during the week on bullish sentiment, trader said.
"Bulk sales from Australia to Turkey have not happened for the past 20 years of my experience. At least I have never heard of it," a trader close to a US scrap supplier said.
During the late week of August 7, a bulk cargo was sold from Australia to Turkey at around $354/mt CFR Turkey on an HMS I/II 80:20 basis, US sources said.
Following the sale to Turkey from Australia, which conventionally aims for the Southeast Asian market, offer prices for bulk cargoes for HMS I/II 80:20 to the East Asian region, including South Korea and Vietnam, rose to $350/mt CFR or even higher, sources said.
"I heard one Vietnamese mill submitted its bid at around $330-$335/mt CFR for bulk HMS but got rejected by suppliers," a Seoul-based trader said. "No suppliers are willing to sell at below $350/mt CFR now."
Due to the high offer prices, South Korean mills and major Vietnamese mills are not even requesting any offer enquiries for bulk HMS at the moment, regional trading sources said.
Amid the bullish sentiment for bulk HMS, both offer prices and buying interest for Russian A3 grade scrap also jumped, sources said.
South Korea's Dongkuk Steel Mill submitted its bid for Russian A3 grade scrap at around $320-$325/mt CFR South Korea late last week; however, no bookings were made as offer prices were prevailing at around $340-$350/mt CFR, a source close to Dongkuk said.
The latest Russian scrap booking was made by Dongkuk during the week of July 31 at $305/mt CFR South Korea for about 40,000 mt.
South Korean mills are now focusing on procuring domestic scrap by increasing their buying prices, South Korean sources said. Mills including YK Steel and Korea Iron & Steel Co. increased their buying prices of all grades of domestic scrap by Won 15,000/mt ($13/mt) effective from August 15, they said.
Platts assessment price for East Asian bulk HMS I/II 80:20 scrap widened to $335-$350/mt CFR Wednesday, up from $325-$335/mt CFR last week.
The midpoint of $342.5/mt CFR is up $12.5/mt week on week.
