Japanese ferrous scrap exports maintained strong growth over the first four months of the year, driven by robust demand from south Asia and Vietnam and despite a sharp decline in shipments to South Korea.
Japanese scrap exports rose by 26pc year on year in the first four months of 2025, to 2.6mn t. Exports to Bangladesh increased by 272pc on the year to 422,000t, while shipments to India climbed sixfold to 113,000t. The sharp uptick in sales to the two countries reflects a shift in trade flows as Japanese sellers redirected exports following a steep drop in demand from South Korea.
South Korea used to be the largest buyer of Japanese scrap, but demand has fallen significantly on the back of weakness in the country's real estate market. Steelmakers in South Korea scaled back production to support steel prices, reducing the need for imported scrap. Purchases were mostly limited to long-term contracts, with spot buying mostly absent. South Korea's scrap imports decreased by 21.6pc year on year over January-May, to 748,000t.
Bangladesh has emerged as one of the key buyers of Japan's scrap, securing five of Japanese scrap dealer Kanto Tetsugen's past six monthly export tenders — with the remaining tender awarded to Vietnam. Kanto Tetsugen raised the maximum shipment volume from 15,000t to 20,000t in the most recent tender on 11 June, helping to reduce freight costs.
The Kanto tender remains an important channel for bulk sales to south Asia, where only limited Japanese ports — such as Tokyo Bay and Ishikari in Hokkaido — can handle vessels loading more than 15,000t. Collecting large-volume cargoes remains a challenge for individual suppliers, prompting some trading firms to co-ordinate combined cargoes.
More Japanese trading companies are turning to south Asia in search of opportunities as demand wanes from most traditional destinations, except for Vietnam. Bangladeshi mills have shifted some procurement from deep-sea cargoes to Japanese scrap, attracted by shorter shipment times and smaller shipment sizes. US scrap exports to Bangladesh fell by 9.7pc on the year to 427,664t during January-April.
Steady demand from south Asia has supported both Japanese scrap export volumes and prices. In the past, when south Asian buyers were less interested in Japanese scrap, sellers were often forced to lower their offers during periods of weak demand from South Korea, Vietnam and Taiwan.
Japan is expected to maintain high scrap export volumes this year, on account of reduced domestic demand. But steelmakers face growing challenges owing to cheap Chinese steel exports, intensifying global trade tensions and sluggish domestic construction activities owing to rising labor costs. Domestic orders for ordinary steel products fell by 3.3pc year on year to 17.9mn t in January-April, according to industry group the Japan Iron and Steel Federation.
