East Asian scrap prices fall post Kanto tender, but buying interest remains weak

• Kanto tender outcome prompts buyers to reassess prices
  
  
• Vietnamese mills remain cautious amid weak steel demand
  
  

East Asian ferrous scrap markets remained under pressure during the week ended 15 June amid weak Vietnamese steel demand and cautious mill buying. Japanese export prices softened following the June Kanto tender, while lower bids weighed on deep-sea scrap sentiment. US-origin bulk scrap indicatives fall as Turkish bulk trade-level prices emerge at $400/t CFR, down $4-5/t w-o-w.

Weekly assessments

• Japanese H2 scrap was heard at $385/t CFR Vietnam, fell by $5/t w-o-w.
  
  
• Japanese H2 scrap was at JPY 52,700/t ($329/t) FOB Tokyo Bay, down by JPY 1,100/t ($7/t) w-o-w.
  
  
• US-origin HMS 80:20 bulk indicative was heard at $395/t CFR Vietnam, fell by $3/t w-o-w.
  
  

Japan

Japanese scrap export sentiment softened during the week following the June Kanto Tetsugen tender, which settled at JPY 54,506/t ($340/t) FAS for a 20,000 t H2 cargo, down JPY 96/t m-o-m. The cargo is likely destined for Bangladesh, marking the country's return to the Kanto market after a two-month absence. However, the awarded level remained above workable prices for most Vietnamese buyers, limiting buying interest.

H2 offers to Vietnam were heard at $388-390/t CFR during the week, while indicative bids remained around $375/t CFR. A higher bid at $385/t CFR was also reported, but could not be widely confirmed. Market participants largely adopted a wait-and-watch approach following the tender outcome, although some traders expected spot prices to remain broadly stable in the near term.

Vietnam

Vietnamese mills remained cautious amid weak finished steel demand and comfortable inventory levels. Buying interest for imported scrap remained limited, with mills continuing to resist higher-priced Japanese cargoes. Market participants noted that the latest Kanto tender result remained above workable levels for many consumers, restricting fresh bookings.

Deep-sea scrap sentiment also softened during the week. US-origin HMS 80:20 offers were heard around $400/t CFR Vietnam, while bids were reported below $390/t CFR, including indications at $393-395/t CFR. A trader noted that Vietnamese buyers increasingly favoured smaller vessel cargoes and domestic scrap, contributing to lower bid levels for deep-sea material.

Outlook

East Asian scrap markets are to remain cautious in the coming weeks as weak Vietnamese steel demand and comfortable inventories continue to weigh on procurement activity. The impact of the June Kanto tender on regional spot prices will be closely monitored, while stable domestic scrap prices and continued Bangladeshi interest may help limit further downside in Japanese export markets.