Japan’s scrap exports fall in November

Japanese ferrous scrap exports in November declined from the four-year high recorded in October on weaker overseas buying appetite, but volumes remained above last year's monthly average.

• Scrap exports fell by 21pc month on month to 590,000t in November, but were still 2pc higher year on year, Japanese customs data released on 26 December show. Total shipments over January-November reached 7.01 mn t, up 21pc from the same period a year earlier.
• Vietnam remained the largest buyer, although volumes slipped by 19pc from last year to 212,000t. Vietnamese mills slowed scrap procurement due to the prolonged rainy season, which dampened construction activity.
• Bangladeshi mills also imported less Japanese scrap compared with October, but volumes more than doubled from a year earlier. Buyers were less active for December-loading cargoes due to payment issues and political uncertainty ahead of the election.
• South Korea was the only major buyer to record a month-on-month increase, largely due to a low base in previous months. South Korean buyers were only sporadically active in the spot market for prime-grade scrap because of a sluggish domestic ferrous market.
• The decline in scrap exports in November was largely expected, as Japanese domestic scrap prices moved above overseas levels following a rally since early October. Domestic price setter Tokyo Steel raised collection prices by a total of ¥4,000/t ($25.60/t) over October and November, while the Argus H2 fob Japan assessment increased by only ¥2,200/t during the same period.
• The rally in the domestic scrap market was mainly driven by the depreciation of the Japanese yen against the US dollar, along with relatively tight domestic supply. Tokyo Steel maintained domestic prices above export levels to discourage scrap outflows, according to trade sources.
• Slower-than-expected steel sales across Asia during the traditional construction peak season have made overseas steelmakers reluctant to pay higher raw material prices. Scrap exports in December may decline further, as overseas buyers largely stayed on the sidelines on persistently weak steel demand.