Japan: Ferrous Scrap Exports Drop 24% in Jan'19

Scrap imports from China and Vietnam observed significant fall in Jan’19

Japan - world's 3rd largest ferrous scrap exporter after EU and US has observed a significant drop in ferrous scrap exports in Jan’19 against exports recorded in Dec’18. As per customs data, Japan exported 506,833 MT ferrous scrap in Jan’19, down 24% M-o-M as against 673,236 MT in Dec’18.

Notably, scrap exports recorded in Dec’18 hit a year high after which Japanese scrap exports could have plunged in Jan’19 amid heavy winter conditions. Also, low generation and sharply declined scrap imports from China and Vietnam ahead of Chinese New Year Holidays in early Feb’19 could have resulted in a decline in exports in Jan'19.

On yearly premises, Japan’s scrap exports dropped 12% Y-o-Y as against 574,924 MT ferrous scrap exports recorded in Jan’18.

South Korea remained the largest importer of Japanese scrap - South Korean steel mills turned active for restocking scrap in Jan'19 witnessing series of bulk cargo bookings from USA, Russia and Japan. South Korea imported 423,223 MT in Jan’19, up 23% M-o-M against 343,034 MT ferrous scrap in Dec’18 occupying highest 84% share. South Korean imports from Japan hit 9 months high in Jan’19 against 442,322 MT imports recorded in Apr’18.

Second largest importer, Vietnam imported 46,956 MT, down 73% M-o-M occupying 9% share. Japan exported 15,003 MT ferrous scrap to Bangladesh in Jan’19 while Taiwan imported 14,555 MT observing stability on a monthly comparison. Malaysia, Indonesia and Thailand witnessed minor imports from Japan in Jan’19.

Chinese scrap imports from Japan lowered significantly hitting a record low 1,555 MT in Jan’19, down 99% M-o-M as against 126,825 MT in Dec’18 and 96% Y-o-Y against 44,225 MT in Jan’18.

Japanese scrap prices remained at lower levels amid limited local demand - Japan’s leading mill kept scrap prices unchanged after a single price cut in Jan’19 amid annual plant maintenance activity. In the export market, average Japanese H2 scrap prices moved further down to JPY 28,000-29,000/MT, FoB levels in Jan'19 against JPY 30,500-31,500/MT in Dec’18. However, scrap prices recovered sharply by JPY 3,000-3,500/MT in Feb’19.

According to the World Steel Association, Japan’s crude steel production recorded at 8.14 MnT in Jan’19, down 4% M-o-M against 8.46 MnT in Dec’18 and down 10% Y-o-Y against 9.03 MnT crude steel produced in Jan’18. Which hit near to 10 years low against 7.66 MnT in Jul’09. On the other hand, domestic consumption of ferrous scrap remained limited resulting in the country’s EAF output to fall by 9% M-o-M to 2.01 MnT in Jan’19.