East Asia: Japan's scrap export market weakens amid Vietnamese rainy season

• Vietnamese buyers remain cautious amid ample bulk bookings
  
  
• Japanese domestic prices stay firm on higher collection prices
  
  

East Asian ferrous scrap markets remained slightly weaker in the week ended 25 May. Japanese export prices softened w-o-w as Vietnam's rainy season, competitive offers, and comfortable inventories continued pressuring import sentiment. However, Japan's domestic market remained relatively stable due to higher collection prices, although cautious Vietnamese buying weighed on prices.

Weekly assessments

• Japanese H2 scrap was at $395/t CFR Vietnam, down by $2/t w-o-w.
  
  
• Japanese H2 scrap was at JPY 53,900/t ($339/t) FOB Tokyo Bay, down by JPY 100/t ($1/t) w-o-w.
  
  
• US-origin HMS 80:20 bulk stood at $396/t CFR Vietnam, down by $2/t w-o-w.
  
  

Japan

Japanese scrap export sentiment softened slightly during the week as cautious Vietnamese buying and weaker rainy season demand pressured prices despite firm domestic collection trends. H2 offers to Vietnam were heard at $398-400/t CFR, with one higher offer at $406/t CFR, while the most competitive offers declined around $2/t w-o-w.

Market participants attributed the softer offers to the onset of Vietnam's rainy season, which reduced buying interest from Vietnamese mills, and weaker Japanese yen. Indicative bids for H2 were heard at $388-393/t CFR Vietnam.

Meanwhile, Japanese domestic prices remained firm, with H2 FAS prices heard at JPY 54,000-55,000/t ($340-346/t), up w-o-w. H2 scrap was assessed at JPY 53,900/t ($339/t) FOB Tokyo Bay, down JPY 100/t ($1/t) w-o-w.

Vietnam

Vietnamese mills remained cautious as several buyers had already secured sufficient bulk scrap cargoes for July shipment requirements. Weak downstream steel demand and comfortable inventories continued limiting fresh import activity.

US-origin HMS 80:20 deals were heard at $395-398/t CFR Vietnam, while shredded scrap was heard at $405-408/t CFR. Australian-origin HMS 80:20 offers were stable at around $400/t CFR, with bids near $395/t CFR.

Buying interest for imported scrap softened further as buyers increasingly preferred smaller Japan-origin vessels while awaiting additional price corrections during the rainy season.

Outlook

BigMint expects Japanese scrap prices to remain supported by firm domestic collection prices and relatively healthy local demand. However, cautious Vietnamese procurement, sufficient inventories, competitive deep-sea cargo availability, and seasonal slowdown during the rainy season may continue limiting upside for export prices in the coming days.