Japan: Scrap Exports in Nov'18 Hit 3 Year Low On Falling South Korean Imports

Steel scrap imports from the largest importer, South Korea in Nov'18 hit lowest in CY18.

Japan - world's 3rd largest ferrous scrap exporter after EU and US has recorded a sharp decline in export and volumes have hit 3-years low in Nov18. As per customs data, Japan exported 488,486 MT ferrous scrap in Nov’18, down 14% M-o-M as against 567,103 MT in Oct’18. Earlier to this, scrap exports fell below 500,000 MT in Sept’2014 when it was recorded at 483,463 MT resulting in exports to hit 38 months’ low in Nov’18.

On yearly premises, Japan’s ferrous scrap exports noted a significant fall of 27% Y-o-Y as against 671,161 MT exports in Nov'17. The country has been witnessing considerable fall in its scrap exports this year as against last year majorly on falling Chinese and Bangladeshi demand.

South Korea remained the largest importer of Japanese scrap - South Korea imported 251,068 MT in Nov’18, down 27% M-o-M as against 342,944 MT ferrous scrap in Oct’18 occupying highest 51% share. Major South Korean steelmakers preferred buying bulk scrap vessels from US and Russia and Japanese scrap imports remained limited. Notably, South Korean imports from Japan hit 2 years low in Nov’18.

Second largest importer, Vietnam imported 109,626 MT, up 7% M-o-M followed by China (93,716 MT, stable M-o-M), Taiwan (28,283 MT, up 24% M-o-M) and Indonesia (2,646 MT, up 2% M-o-M) in Nov'18. On the other hand, Bangladesh and Thailand observed very minor import volume in Nov’18.

Japanese scrap export prices fall JPY 2000-3000/MT in Dec’18 - Average Japanese H2 scrap prices stood at JPY 34,500/MT, FoB in Nov'18. Which moved down further to an average of JPY 31,500/MT, FoB in Dec'18. Despite a sharp fall in prices, weak demand from South Korean importers kept Japanese scrap exports bounded in Nov’18. Latest bid of Hyundai Steel for Japanese H2 stands at JPY 29,500/MT, FoB, down around JPY 2,000/MT (USD 19) M-o-M.

Japanese scrap exports decline 10% during Jan-Nov’18 - Japan exported 6,543,279 MT ferrous scrap during Jan-Nov’18, down 10% Y-o-Y as against 7,308,554 MT during the same period last year. Falling demand mainly from China and other Asian markets and strong domestic demand on Olympics-2020 constructions could have resulted in lowering scrap exports from Japan.

According to the World Steel Association report, Japan’s crude steel production observed marginal lift in Nov'18 recording at 8.66 MnT as against 8.56 MnT in Oct’18. During Jan-Nov18, Japan’s crude steel production stand almost stable at 95.86 MnT which was recorded at 95.94 MnT the same period last year.

Country-wise Japan ferrous scrap exports -

Quantity in MnT,
Source: SteelMint Stats