- Rising collection costs, higher bids support H2 tags
- Lower freights to Vietnam boost Japan’s H2 exports
Japanese H2 scrap export offers inched up w-o-w amid stronger demand, rising collection costs, and higher bids from buyers. Domestic FAS collection prices for H2 increased to JPY 40,000-41,000/t ($271-278/t) from JPY 39,500-40,500/t ($268-275/t) in the previous week.
Additionally, lower H2 Japan-Vietnam freights made exports more competitive and boosted trade volumes. However, some mills remained cautious, limiting procurement due to price opacity.
Despite a decline in deep-sea scrap prices, Japanese offers held firm, supported by strong domestic pricing and buyers’ demand for stable supply sources.
As a result, BigMint’s weekly assessment of Japanese H2 scrap inched up by JPY 200/t ($1.3/t) to JPY 41,700/t ($283/t) FOB Tokyo Bay in comparison with JPY 41,500/t ($281/t) in the previous week.
According to the Japan Iron and Steel Association, the average H2 scrap price across Japan’s three major regions in the fourth week of February rose to JPY 38,000/t ($258/t), up JPY 300/t ($2/t) from the prior week. Regional prices stood at JPY 38,600/t ($262/t) in Kansai, up JPY 700/t ($5/t); JPY 35,300/t ($239/t) in Chubu, up JPY 200/t ($1.3/t); and JPY 40,000/t ($271/t) in Kanto, unchanged w-o-w.
Other market updates
Vietnam: Vietnam’s imported scrap market saw mixed activity as Japanese H2 offers rose to $325-335/t CFR, but buying interest remained limited due to a bid-offer gap, with bids at $315-320/t CFR. A deal at $330/t CFR for 5,000 t pointed to some demand, supported by optimism around government-backed construction projects. Lower H2 Japan-Vietnam freights improved competitiveness, but mills remained cautious amid price opacity and exchange rate fluctuations.
Meanwhile, deep-sea scrap prices weakened, with US- and Australian-origin offers falling to $360-365/t and $355/t CFR, respectively. Traders continued to monitor China’s policy developments, developments on anti-dumping measures, and billet pricing trends for further market direction.
South Korea: South Korea’s imported scrap market remained sluggish, as demand failed to pick up despite the start of the peak season. Major steel mills’ scrap inventory rose 4% w-o-w to 635,000 t, with a 12% increase in the central region, led by Dongkuk Steel, while the southern region saw a slight 2.2% decline. Hyundai Steel’s Pohang plant reported a 6% drop in inventory, while POSCO’s stock levels increased.
Market sentiment remained weak amid slow end-product sales, with participants closely monitoring construction and manufacturing demand. Without a significant rebound in steel consumption, scrap buying is expected to stay subdued.
Taiwan: Taiwan’s scrap market saw a slight improvement, as Feng Hsin Steel raised its domestic scrap buying price and rebar offers by TWD 300/t ($9/t) w-o-w due to better demand. Imported scrap prices remained firm, with US-sourced HMS 1&2 80:20 deals rising to $312-$313/t CFR, while offers stayed at $315-$320/t CFR. Mills in Taichung showed some interest, but many buyers remained focused on billets, where prices softened. Meanwhile, Chinese billet offers dropped by $5-10/t to $450-$455/t CFR Taiwan amid a weaker domestic market, keeping overall scrap demand subdued despite minor gains in the rebar sector.
Outlook
Japanese H2 scrap export offers are expected to remain firm in the near term, supported by strong domestic pricing and demand. Lower freights to Vietnam may sustain export competitiveness, but cautious procurement from mills and price opacity could limit upward momentum. In Vietnam, scrap demand may improve if construction activity strengthens, though buyers remain hesitant due to exchange rate fluctuations.
South Korea’s sluggish demand and high inventory levels may cap price gains, while Taiwan’s market sentiment will depend on billet price trends and finished steel demand. Overall, scrap prices may see stable-to-slightly bullish movement, contingent on regional steel market recovery.
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