Posted on 02 Jun 2021
Japanese ferrous scrap exports rose in April from a month earlier, driven by strong demand from Asian steelmakers chasing productivity to supply semi-finished steel to the Chinese market.
Japan exported 886,823t of ferrous scrap in April, up by 22pc from March, although shipments declined by 1.8pc from a year earlier, Japan customs data show.
The lower year-on-year volume reflected subdued Japanese scrap demand, especially in the first half of last year, as Covid-19 fuelled exports from the country.
Japanese domestic demand has increased recently but overseas buyers were chasing Japanese scrap to produce semi-finished products for exports to China. Tangshan billet ex-works prices spiked by 950 yuan/t ($132/t) from mid-February to the end of March, without value-added-tax. The Argus H2 fob Japan price gained ¥4,700/t ($42.90/t) over the same period. Mid-February to end-March was the purchasing cycle for April shipments for most buyers. China's semi-finished steel imports were at 750,547t in April, up by 22pc from March and by 72pc on the year, Chinese customs data show.
South Korea returned as the top destination for Japanese exports last month, displacing Vietnam that has held the top spot since June 2020. South Korean mills were active in the seaborne market, supported by strong steel demand from the construction and shipbuilding sectors. But South Korea was the only country that registered a decline from April 2019 volumes, with demand for seaborne scrap gradually receding on buyers' increasing reliance on domestic cargoes.
Exports to Bangladesh and China rose sharply. Chinese mills booked more cargoes as trial orders and traders took long positions on a bullish Chinese steel market outlook.
Japan's ferrous scrap exports are unlikely to stay at current high levels given stable domestic demand, while overseas buyers' procurement is subject to fluctuations in steel markets as seen in May.
Source:Argus
