East Asia: Scrap prices edge up w-o-w on tight supply, higher Japanese offers

• Tight supply supports firm scrap offers
  
  
• Tokyo Steel raises scrap purchase prices by $9/t post-Kanto
  
  

East Asian scrap markets strengthened in the week ended 13 April, supported by higher Japanese export offers and tight supply. Rising domestic prices in Japan, along with firm freight rates, continued to push export offers upward and support overall market sentiment.

However, buying sentiment in Vietnam remained cautious, with participants awaiting Kanto tender clarity, limiting trading activity despite firmer indications.

Meanwhile, Tokyo Steel raised scrap purchase prices by JPY 1,500/t ($9/t) across all plants to JPY 52,500/t ($329/t), following strong Kanto tender results and continued support from firm domestic and overseas demand.

Weekly assessments

• Japanese H2 scrap was at $390/t CFR Vietnam, up by $5/t w-o-w.
  
  
• H2 scrap was at JPY 52,000/t ($326/t) FOB Tokyo Bay, up by JPY 800/t ($5/t) w-o-w.
  
  
• US-origin HMS 80:20 bulk stood at $398/t CFR Vietnam, down by $2/t w-o-w.
  
  

Japan: Export prices rise post Kanto tender

Japan's Kanto tender rose sharply to JPY 54,329/t ($340/t) FAS, the highest since March 2023, widening the gap with export markets and dampening overseas buying interest, particularly from Vietnam. Strong domestic demand continued to support higher price levels. The cargo under April contracts is scheduled for vessel loading, with completion expected by 31 May.

The cargo is likely headed to Vietnam, though some expect it may be diverted to Bangladesh with H2 along with Shindachi cargoes to optimise freight. However, Bangladesh demand remains weak due to high freight and elevated landed costs.

H2 export prices increased w-o-w by JPY 800/t ($5/t) to around JPY 52,000/t ($326/t) FOB Tokyo Bay-- firm domestic procurement prices and improved offer levels.

Vietnam: Wait-and-watch approach limits activity

Vietnamese buyers remained largely inactive last week, adopting a wait-and-see approach amid rising offer levels. Indicative offers for H2 were heard in a wide range of $390-395/t CFR, while bids were limited around $385/t CFR.

According to market participents, a reported US-origin HMS 80:20 deal at $400/t CFR implies H2 parity near $390/t CFR Vietnam, effectively capping workable buying levels. Buyers indicated resistance beyond this level despite firm global sentiment.

Mills remained in a wait-and-watch mode, having already secured near-term requirements and showing limited urgency for fresh bookings. Meanwhile, US-origin offers were heard at $400-405/t CFR against bids near $385/t. Reduced supplier focus on Vietnam and vessel constraints from Australia kept supply tight, supporting prices.

Outlook

Prices are expected to remain firm in the upcoming days, driven by tight supply, higher domestic prices in Japan, and constrained vessel availability, while cautious buying in Vietnam may continue to limit trading volumes.