Posted on 24 Mar 2021
Japan’s domestically-generated H2 grade scrap prices fell for the second week over March 15-19 for both domestic and overseas sales, down another Yen 1,000-3,500/tonne ($9-32/t) on week, and the downtrend is expected to last at least until the end of this month, scrap traders in Tokyo shared on March 23.
As of March 19, shippers at Tokyo Bay ports such as Odaiba, Funabashi and Yokohama – all major ports for scrap exports and deliveries to domestic steel mills in western Japan – were paying Yen 38,000-39,000/t FAS, Yen 3,000/t lower on week, sources confirmed.
Delay in arrivals of vessels to load scrap has seen scrap stockyards at the ports to the brink of their full capacities, forcing the shippers to cut the scrap buying prices more steeply to discourage scrap deliveries for now, market sources shared.
“We heard that some vessels have been scheduled to arrive for scrap loading this week, but these will not be sufficient to stop prices from falling,” a Tokyo-based scrap trader commented.
Vessel shortage and higher freight charges have discouraged shippers from signing new export deals too, according to the Japanese market sources.
“We don’t want to offer now, as vessel shortage has deteriorated, so we may end up failing to find vessels to deliver on time,” a second scrap trader in Tokyo shared, and “freight charges have been soaring recently, so we’d better step away from sign deals on CFR terms to minimize risks,” he added.
The freight charge for a dry bulk vessel capable of carrying 5,000 tonnes of scrap to Vietnam has risen to $50/t as of March 23 from about $45/t last week, he added.
Japan’s steel scrap exports prices, thus, have been declining more moderately, and the Chinese buyers, for example, were bidding around $470/t CFR for the Japanese HS material on March 19, or down $10/t on week, trading sources shared.
Last Friday, a South Korean mill was heard bidding the Japanese H2 material at Yen 39,000-39,500/t FOB last Friday with the volume ranging just 2,000-4,000 tonnes. The price was Yen 1,500-2,000/t lower than the booking price by Dongkuk Steel Mill on March 16, or Yen 2,500-3,000/t lower than the booking by Hyundai Steel on March 11, according to the Japanese traders.
As of March 18, a Vietnamese mill was heard booking the Japanese H2 material at $420/t CFR or about Yen 40,000/t FOB, down Yen 3,500/t on week.
Scrap dealers, under the current circumstances, thus, have been delivering more to the mini-mills instead of shippers due to higher prices from the steel producers, as by last Friday, mini-mills in Kanto area, around Tokyo were paying Yen 40,000-41,000/t for H2 material, or down Yen 1,000-1,500/t on week, the first trader noted.
“Dealers will try to rush out more stocks instead of keeping them at their stockyards, as they do not want to carry the inventories over to the next fiscal year that starts on April 1,” he added.
Source:Mysteel Global
