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Japan’s domestic and export scrap prices diverge in November

By: SteelBis Research

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After all fall in Japanese export scrap prices last week, sellers have diverted their focus on local sales where domestic steel mills are competitively paying higher prices. Market prices in the Kanto Area during November have been quoted at levels around ¥56,000/t, up by ¥3,000/t from October as demand from EAF steelmakers remains robust, while mills in the Kansai region have been purchasing at a weekly price of ¥56,000-57,500/t Delivered.

Following the polarization between Japan’s domestic and export markets, Kanto dockyard yards’ FAS collection prices for H2 grades rose from 51,500-54,000 yen per ton to 53,000-54,500 yen per ton on November 24. Similarly, collection prices for HS and Shindachi prices ranged from ¥61,000-62,000/t and ¥61,000-63,000/t respectively, compared to the previous week where they were ¥60,500-63,500/t and ¥61,500-63,000/t Delivered.Demand for Japanese scrap in export regions remains muted as buyers have shifted their focus towards more competitive material, with only a few deals reported last week.

The East Asian deep-sea bulk market has seen a trend of sideways prices as there was little reason to lower prices on the supply side based on the higher level of competitive markets. The South Korean HMS 1&2 (80:20) price idea is valued at $525-530/t CFR, unchanged from last week, while mills in Vietnam have been bidding between $530-535/t CFR, down from $535-545/t CFR level a week ago.

Last week the Japanese H2 bid price from South Korean mills was down by ¥2,000/t from the previous sales at ¥49,500/t FOB. Offers by South Korean mills for shredded were ¥56,000/t, ¥57,000/t for heavy scrap (HS) and ¥63,500 /t FOB for Shindachi bara prime.

Weaker sentiment in the export market has weighed on Japanese offers this week, on November 24, the weekly H2 iron scrap index FOB Japan fell to ¥50,000/t, down from 51,500/t last week.

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