Posted on 02 Aug 2021
Japanese scrap exports totalled 748,600t in June, with firmer demand from South Korea driving shipments to the second-highest level this year.
June exports increased by 7pc from a month earlier, taking January-June volumes to 4.2mn t, Japan customs data show. But exports during the first half of the year fell by 14pc.
South Korea was the top destination for Japanese scrap, as South Korean mills have been active in the seaborne ferrous scrap market this year on robust steel demand in domestic and export markets. South Korea's crude steel production was up by 8.3pc in the first half of the year to 35.2mn t, according to World Steel Association data. Blast furnace mills also lifted their scrap use with carbon neutralisation targets. South Korean mills have focused on high-grade scrap since June. Japan's ferrous scrap exports hit their highest level in the first half during April at 88,823t.
Mainland China surpassed Taiwan to find itself among the top three buyers of Japanese scrap in June. Chinese buyers were aggressive before mid-May on a bullish steel outlook, while Taiwanese buyers turned to US containerised scrap that was available at attractive prices.
Japanese scrap exports are likely to inch lower from July, with Chinese buyers on the market sidelines following the drop in domestic scrap and steel prices from mid-May. Southeast Asian buyers also paused imports on surging Covid-19 cases since the end of June that has stalled steel demand.
The Japanese domestic market demand was firm. The wide price gap between domestic and overseas markets prompted many Japanese suppliers to prioritise domestic sales. Japan's trade ministry predicted steel output in third quarter would continue to increase, supported by firmer demand from the manufacturing sector, particularly auto and industrial machinery producers.
Source:Argus
