Japanese ferrous scrap export prices fell by JPY1,250-1500/mt ($11-14/mt) due to a glut of scrap and persisting weak demand in the domestic market. Prices dropped for a third successive week. Declining global billet prices have forced Japanese suppliers to lower their prices for billet below $410/mt cfr Southeast Asia and Manila.
Automakers like Toyota and Ford have announced production cuts in Japan. Toyota will stop its seven production lines from April 3-13. The production halt is likely to extend further with a drop in auto demand in the importer countries.
The weekly Davis Index for #2 HMS settled at JPY20,750/mt ($187/mt) fob Japan on Wednesday, down by JPY1,250/mt. Trades for #2 HMS with mills in Vietnam and South Korea concluded at JPY21,500/mt fob Japan. Late last week, #2 HMS trades were reported at JPY21,500/mt fob Japan.
A few yards may even offer #2 HMS at JPY20,500-21,000/mt fob Japan if the domestic demand does not pick up. The Davis Index for busheling settled at JPY23,250/mt ($209/mt) fob Japan on Wednesday, down by JPY1,500/mt from the prior Wednesday.
Suppliers offered #2 HMS at $240-245/mt cfr Taiwan. The Davis index for Japanese HMS 1&2 (50:50) in small bulk cargoes settled at $230/mt cfr Taiwan, down by $8/mt from the prior Wednesday. Mills bid for the same at $225-230/mt cfr Taiwan following the drop of $5-10/mt in containerised offers from the US.
Japanese HMS 1&2 (50:50) in small bulk cargoes was offered at $235-240/mt cfr Vietnam, with a few bids at $230//mt cfr Vietnam. The index for HMS 1&2 (50:50) settled at $235/mt cfr Vietnam, down by $10/mt from the prior week. HS and busheling scrap in bulk cargoes were offered at $255-260/mt cfr Vietnam.
Though participants expected purchase prices of Tokyo Steel to drop, the mill held its domestic ferrous scrap purchase prices flat since March 13. Prices for #2 HMS remained flat at JPY18,000/mt del Kyushu plant. While the prices for #2 HMS in Utsunomiya, Tahara, Okayama and Takamatsu were at JPY19,500/mt, JPY20,500/mt, JPY19,000/mt and JPY18,000/mt, respectively. Bids for busheling remained at JPY22,500/mt del Tahara and JPY21,500/mt del Utsunomiya.