Asian bulk HMS market stayed quiet while Japanese H2 scrap price rises

Tokyo (Platts)--13 Sep 2017 751 am EDT/1151 GMT

Japanese scrap export prices stayed stable during the week, but a weaker yen this week has lifted Japanese yen contracts slightly higher, sources in Tokyo said.

S&P Global Platts assessed Japanese H2 grade ferrous scrap export price at Yen 32,500-33,000/mt ($296-300/mt) FOB Tokyo Bay Wednesday, the midpoint of Yen 32,750/mt FOB is Yen 250/mt higher from last week's assessment.

On September 8, South Korea's leading electric arc furnace mill Hyundai Steel submitted its bid at Yen 32,500/mt FOB for H2 material, unchanged from its previous bid on September 1. Hyundai's bids for Shindachi grade were Yen 36,500/mt FOB and Yen 35,500/mt for HS, both unchanged. The steelmaker booked about a total of around 30,000-40,000 mt at its latest bids, a source close to the company said.

Other South Korean mills are also targeting at the same prices as those from Hyundai, and some are currently negotiating with Japanese traders, trading sources in Tokyo said.

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A Vietnamese mill is heard to have booked 5,000 mt of Japanese H2 material at $337-338/mt CFR late-last week, equivalent to around Yen 33,200-33,300/mt FOB.

Other Vietnamese mills are targeting at $330/mt CFR Vietnam. However, one major Vietnamese mill submitted its bid at $330/mt CFR Vietnam this week, but Japanese traders rejected the bid price, a Vietnam-based source said.

"$330/mt CFR was around Yen 32,380/mt FOB last week but now at around Yen 32,730/mt FOB based on the current exchange rate," another Tokyo-based trader said.

"As the exchanged price is higher than what South Korean mills are currently paying, some traders may start accepting soon," he added.

The highest bid in the Tuesday's Kanto Tetsugen tender for H2 export to be shipped by end-October, was Yen 32,230/mt FAS, up Yen 620/mt from last month's highest bid, and it is equivalent to around Yen 33,000-33,200/mt FOB.

"The winning bid was higher than the latest booking prices by South Korean mills, and it led some traders to start considering lifting their target prices to Yen 33,500/mt FOB from Yen 33,000/mt FOB last week," another Tokyo-based scrap trader said.

In Japan, traders are currently paying around Yen 31,500/mt FAS to collect H2 material to be exported from eastern Japan, unchanged from a week ago, but it once dropped to Yen 31,000-31,500/mt FAS late-last week and increased back to Yen 31,500/mt FAS late Tuesday.

Japan's leading mini-mill, Tokyo Steel Manufacturing has lifted its scrap buying prices by Yen 500-1,000/mt for all grades at all works and a steel center effective from Wednesday arrivals. H2 buying price at its Utsunomiya works, north of Tokyo, has become Yen 33,000/mt.

The Asian bulk heavy melting scrap market remained quiet during the week, regional sources said.

Currently, offer prices for bulk HMS I to South Korea are still staying at around $355/mt CFR South Korea from the US West Coast but slightly dropped to around $360/mt CFR South Korea from the East Coast, Seoul-based sources said.

The buying interest from mills however still remains at around $350/mt CFR South Korea on HMS I/II 80:20 basis.

"US West Coast suppliers are now out of cargoes to sell to East Asia after Hyundai's booking last week," a trader close to a US supplier said.

On Sep 8, Hyundai Steel confirmed two bulk cargoes of a total of around 90,000 mt at $351/mt CFR South Korea on HMS I basis, the source close to the company said.

Earlier this week, Hyundai also made some bookings for around 23,000 mt of China-origin light grade shredded scrap at $325/mt CFR South Korea, regional sources said.

In Vietnam, mills are holding off bookings this week while offer prices are on the same level as to South Korea, sources said.

"US bulk offer prices are too high, and we are eyeing at smaller cargoes," a Vietnamese major mill source said.

Meanwhile, offer prices for Russian A3 grade to South Korea slightly bounced back to around $350/mt CFR this week from around $345/mt CFR South Korea in the early week of September 4, Platts was told.

Platts assessment price for East Asian bulk HMS I/II 80:20 scrap remained unchanged at $350-$354/mt CFR Wednesday, from the previous week.

--YunBeom Kevin Seo,

--Yoko Manabe,

--Edited by James Leech,

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