TOKYO Japanese ferrous scrap export prices continue to fall as South Korean mills, in particular, move to cut their scrap purchasing prices both at home and abroad.
The highest winning bid at the latest auction by Tokyo-area scrap dealers for deliveries next month of H2 grade scrap (a mix of No. 1 and No. 2 heavy melt) fell 3.5 percent from last months auction to 33,670 yen ($338) per tonne f.a.s., or around 34,700 yen ($349) per tonne f.o.b.
Export prices last month hit their highest level in well over a year after rising more than 50 percent over the course of just five months.
The latest prices also mark a retreat from the export auction held by Osaka-area dealers late last month, which saw the average winning bid come in at 34,000 yen ($342) per tonne f.a.s.
The drop in prices hasnt come as a big surprise, given the sharp devaluation of the Japanese currency in recent weeks and the fact that recent export deals to Korea were settled at levels even lower than those seen at the latest auction.
At the same time, domestic market prices have been retreating ever since Tokyo Steel Manufacturing Co. Ltd. began reducing its purchase prices at the start of the month. The company is now paying 34,500 yen ($347) per tonne for deliveries to its Tahara Works, 33,500 yen ($337) per tonne for those to Utsunomiya Works, 33,000 yen ($332) per tonne for those to Okayama and Kyushu, and 32,000 yen ($322) per tonne for those to its Takamatsu facility.
A similar trend appears to be taking place in Korea, the main export destination for Japanese scrap, where companies such as Hyundai Steel Co. Ltd., Posco Specialty Steel Co. Ltd. and Dongkuk Steel Mill Co. Ltd. reportedly were set to begin cutting their domestic scrap buying prices April 11.
A version of this article was first published by AMM sister publication Steel First.