Export prices in the Japanese steel scrap market have been moving up at slower pace recently. One of the South Korean importers has showed interest in buying a lot of HMS 2 from Japanese scrap collectors at JPY 39,000/t FOB ($474/t FOB, $1 = JPY 82.2), up JPY 500/t ($6/t) w-o-w. Another company, on the contrary, refused to pay more than JPY 38,000/t ($462/t) FOB. Thus, the average market price for Japanese HMS 2 is JPY 38,500/t ($468/t) FOB, which corresponds to the latest contract level of Hyundai Steel made earlier last week.
At the same time, domestic scrap prices in Japan have come close to export ones. During one week period Tokyo Steel increased purchase prices twice. Its subsidiaries are buying domestic material by JPY 500-1,000/t ($6-12/t) higher from January 15 and by JPY 500/t ($6/t) higher from January 21.
In particular, Okayama is offering JPY 38,500/t ($468/t) for HMS 2 for seaborne and overland arrivals (prices are given exclusive of 5% VAT). Takamatsu is ready to pay JPY 36,500/t ($444/t) to local scrap collectors, any type of delivery. Tahara is buying HMS 2 at JPY 37,500/t ($456/t) seaborne arrivals and JPY 38,000/t ($462/t) overland arrivals.
UtsunomiyŠ° has revised its purchase prices upwards only once. It sources the material from the domestic market at JPY 38,000/t ($462/t) overland arrivals, against JPY 37,500/t ($456/t) in early January.
Domestic scrap prices are expected to stay at the current levels till the end of the month. Healthy domestic demand will play into the hands of traders who service foreign contracts and do not want the upward trend to reverse.
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