Export prices of Japanese scrap edged down during the week, trading sources in Japan said Wednesday.
The main importing markets in South Korea, Vietnam and Taiwan were slowing down ahead of the Lunar New Year.
Platts assessed its weekly H2 scrap price at Yen 16,300-16,500/mt ($136-138/mt) FOB Tokyo Bay on Wednesday, compared with Yen 16,500/mt FOB last week. The implied midpoint of Yen 16,400/mt FOB is down Yen 100 on the week.
South Korea's Hyundai Steel booked over 30,000 mt of Japanese H2 ferrous scrap for March shipment late last week and early this week.
While the steel mill paid Yen 16,000/mt FOB for smaller lots, it paid Yen 16,300/mt FOB for contract tonnages of 4,000 mt and above, and Yen 16,500/mt FOB for volumes of 6,000 mt and over.
The Korean steel company paid the premium extra for the larger tonnage lots because it was not able to secure enough offers from Japanese traders at the lowest price of Yen 16,000/mt FOB. Japanese traders are aiming to sell Japanese H2 scrap at Yen 16,500/mt FOB and other Korean mills are also paying H2 scrap at this level, Japanese trading sources said.
The other markets for Japanese scrap exports in Vietnam and Taiwan were quiet. Vietnamese mills last booked H2 scrap at $175/mt CFR the previous week.
No contracts concluded this week, traders said.
Taiwanese mills are targeting $165/mt CFR for H1/H2 50:50 and Shindachi for $180-182/mt CFR for April shipment, but this is generally too low for Japanese suppliers to accept, Japanese trading sources said.
In Japan, scrap demand from the domestic mini-mills was still weak but traders are aggressive to collect scrap for loading to vessels for export.
Japanese traders are currently paying Yen 14,500-15,000/mt free alongside ship to collect H2 material to be exported from the Tokyo Bay area, unchanged from last week.
"Scrap demand for export is active but demand from domestic mini-mills is slow, so Japanese scrap prices are stable at the moment," a Tokyo-based scrap trader said.
Meanwhile, prices in the East Asian import market for bulk ferrous heavy melting scrap fell on weak demand. Buying interest was thin because of the approaching Lunar New Year holiday, trading and importing sources said Wednesday.
Platts assessed East Asian bulk HMS I/II 80:20 scrap on Wednesday at $180-186/mt CFR, down from $188-190/mt CFR the week before. The implied midpoint of $183/mt CFR is $6 lower on week.
A South Korean mill was heard by traders to have booked one 32,000 mt scrap cargo last Tuesday from a US supplier for March arrival at $185.50/mt CFR for HMS I scrap.
Another S Korean mill previously ordered one cargo from US at $188/mt CFR HMS I basis, for March arrival, during the week of January 11.
The same supplier also offered one 21,000 mt scrap cargo from Hawaii to Vietnam last week. The cargo consisted of 13,000 mt of shredded and the remaining 8,000 mt was HMS 80:20 scrap.
The offered price was $185/mt CFR Vietnam for HMS 80:20 and at $190/mt CFR for shredded. Trading sources in Vietnam said nobody took up the offer.
A trader said Vietnamese mills did not want to purchase shredded scrap because they preferred to use HMS 80:20 scrap.
Also, there was higher risk involved because of the larger cargo size. He said that the Vietnamese mills preferred Japanese scrap cargoes of 5,000-10,000 mt.
The same scrap cargo from Hawaii was also offered last week to Taiwan at $180/mt CFR. There were no takers, traders said.
"Demand for the finished steel product is very bad," a Taiwanese trader said on the lack of buying interest for the cargo.
"The market is very quiet," a procurement manager with a Malaysian mill said. "Most of the mills will refrain from buying because they don't know where steel prices will be at after the Chinese New Year holiday (February 7-13)," he said.
