Japan: H2 scrap export offers remain largely stable w-o-w amid dull overseas demand

• JPY slide lifts Japan scrap offers, demand still lags
  
  
• Korean steel mills sit out as inventories pile up
  
  

Japan's H2 ferrous scrap export prices rose slightly by JPY 150/t ($1/t) w-o-w in mid-July, supported by a weakening JPY. Despite the currency depreciation, sellers kept offers firm due to subdued overseas demand and limited trade activity driven by summer production cuts and global uncertainty.

H2 offers to Vietnam were heard at $318-320/t CFR, while bids lagged at $310-315/t CFR, reflecting cautious sentiment among regional buyers. While a weaker JPY typically improves exporter margins, it failed to drive any meaningful pick-up in trade interest this week.

BigMint's weekly assessment placed H2 scrap up by JPY 150/t ($1/t) w-o-w at JPY 41,250/t ($277/t) FOB Tokyo Bay.

Import market updates

Vietnam: In Vietnam, slow downstream rebar sales continued to weigh on scrap demand, with mills showing limited interest in fresh bookings. Scrap inventories remain sufficient for current low production levels.

Another trader stated, "Rebar sales are poor. As a result, northern mills have enough inventory and are not looking to purchase more." This highlights the regional disparity in demand and the overall cautious approach among buyers.

Some mills in Vietnam have paused scrap purchases and may resume by end-July, depending on market conditions. Demand is expected to pick up post-monsoon as construction activity improves.

South Korea: Steel scrap inventories at major South Korean mills rose to 916,000 t in mid-July, the highest since late April, up 6% w-o-w and 28% from mid-June. The increase was led by reduced consumption, production cuts, and pre-summer maintenance stocking.

Southern mills, especially large electric furnace producers, contributed most to the build-up, while inventories at smaller mills remained largely unchanged. With sufficient stocks, mills are expected to adopt a conservative scrap buying strategy in the near term.

Taiwan: Taiwan's imported scrap market continued to soften, with US-origin HMS 80:20 down to $293/t CFR and Japan-origin H2 falling for the fifth straight week to $303/t CFR. In response, Feng Hsin Steel reduced both its rebar and local scrap procurement prices by TWD 200/t for 14-18 July.

Rebar is now being offered at TWD 16,200/t ($553/t) exw, while domestic HMS 80:20 scrap is priced at TWD 7,800/t. Weak construction demand and limited cost support from imports are keeping mills cautious in their purchases.

Outlook

Subdued demand from importers like Vietnam and Taiwan could keep trade volumes low until the post-monsoon recovery. On the other hand, Japanese scrap offers may stay firm, backed by a weaker JPY and tight domestic supply.