Ferrous scrap prices continued to soar in East Asia on strong demand for scrap bolstered by rising regional steel prices.
Market participants are finding it difficult to keep pace of the rising market, trading sources said Wednesday.
Overseas buyers' strong scrap buying appetite is propelling Japanese scrap prices higher, Japanese trading sources said.
Platts assessed its weekly H2 scrap price at Yen 26,500/mt ($243/mt) FOB Tokyo Bay, up Yen 3,500/mt from last week's assessment.
On Wednesday, leading South Korean electric arc furnace mill, Hyundai Steel bid Yen 26,500/mt FOB for Japanese H2 material, Yen 28,500/mt FOB for HS and shredded and Yen 29,000/mt FOB for Shindachi grade, up Yen 2,500/mt from Hyundai's previous bid late last week, sources in Tokyo said. These are for the shipment by June 15.
Hyundai Steel aims to book 40,000-50,000 mt of Japanese scrap, Hyundai Steel sources said Wednesday.
The company normally secures 30,000 mt of scrap a week but raised its target booking volume ahead of Japan's April 29-May 8 Golden Week holiday when many Japanese companies will shut down.
"We heard Japanese traders made offers at Yen 26,000-28,000/mt FOB.
Since Hyundai's bid was higher than the lowest offer price, we can assume that Hyundai really wants to secure a larger volume of Japanese scrap," a Tokyo-based scrap trader said.
Some Taiwanese customers early this week were aiming to buy H1:H2 50:50 at $250-$255/mt CFR, another Japanese trader said.
This was equivalent to about Yen 23,980-24,535/mt FOB for H2 material and since it was below the Yen 24,800/mt FOB paid by South Korea's Dongkuk Steel Mill on Monday, she didn't think that Taiwanese customers were able to secure any material. She said she hadn't heard of any deals to Vietnam either because export offers were very limited.
"Japanese scrap prices are increasing day by day," another Tokyo trader said. "Scrap prices are rapidly increasing, traders would like to wait for prices to rise before making export offers," he said.
In Japan, domestic scrap prices are also increasing rapidly. Tokyo Steel Manufacturing, Japan's leading mini-mill, announced Wednesday it would lift its scrap buying prices for all grades at all works and one steel center by Yen 500-1,500/mt effective from Thursday arrivals.
Tokyo Steel's H2 buying prices at its Utsunomiya works, north of Tokyo, would rise to Yen 24,000/mt after Wednesday's increase.
Over the past week, the company raised its scrap purchase price four times totaling Yen 1,500-3,000/mt depending on the works. Other mini-mills in Japan have also lifted their buying prices in line with that of Tokyo Steel.
"The only way for mini mills to secure sufficient scrap is to pay higher prices," a procurement manager with a western Japanese mini mill said.
Scrap collectors are holding on their scrap in anticipation of further price rises and at the time, there are no signs that active loading of scrap for export will slow down.
Meanwhile, the East Asian import market for heavy melting scrap continued to rise tracking other scrap markets, including Turkey, as well as rising Chinese billet and steel prices.
Platts assessed East Asian bulk HMS I/II 80:20 scrap on Wednesday at $265-$270/mt CFR, up from the previous week's $245-$250/mt CFR. The implied midpoint of $267.5/mt was $20 higher.
Traders reported hearing that an Indonesian mill booked from a West Coast US supplier one bulk cargo for May shipment at $270/mt CFR HMS 80:20 basis.
"$270/mt CFR sounds about right," an Australian trader said. "That price level is definitely in range now," he said.
More than a week ago, a Thai mill booked two scrap cargoes for May shipments from two different West Coast US suppliers, at $265/mt CFR 80:20 basis and at $272/mt CFR for shredded grade scrap, Thai sources said.
The Thai mill has indicated it will suspend buying for now, a Thai trader said, adding that the scrap market was quiet.
A Taiwanese trader said there were limited scrap offers in the market now. "Every day there is a new price in the market," he said. Buyers and sellers don't know what to do because prices are going up so quickly.
While domestic rebar prices were also rising in Taiwan, they were lagging behind those for scrap. Taiwanese steel mills are withholding their offers for rebar because of uncertainty about their production costs due to rapidly rising scrap prices, he said.
