Japan

The Kanto joint tender was unsuccessful for two consecutive months in November and December 2021. While domestic ferrous scrap prices remained high, demand from Vietnam - a major importer in the Asian market - was in decline and pricing kept low. In the joint export bid held in December, the price is believed to have been more than Yen 2000 per tonne (US$ 17.47) short of the union’s desired price.

However, the export bid on January 12 this year totalled 10,100 tonnes at Yen 50,983 per tonne (US$ 445.27), which is equivalent to local mills’ purchasing prices and around Yen 2000 higher than the Kanto Gulf price (which is an export price and not a domestic scrap price), partly due to Vietnam’s willingness to buy towards the end of the old year in early February.

Reviewing the ferrous scrap market in 2021, the H2 price climbed beyond Yen 55,000 per tonne (above US$ 480.35) at one stage while the average price for the year exceeded that of 2008 and achieved a record high. In addition, the price of high-end scrap - which had been markedly sluggish - soared to the extent that the price differential to H2 exceeded Yen 10,000 per tonne (or US$ 87.33) at its peak.

The global recovery in crude steel production increased the demand for ferrous scrap but the influence of the COVID crisis remains. According to the World Steel Association, crude steel production among its 64 reporting countries around the world amounted to 158.7 million tonnes in December. Although down 3% on December 2020, it ended a run of three months in which the total had been below 150 million tonnes. China’s production cuts have had a major impact, with the country’s steel output still 6.8% lower year on year in December 2021.

According to the Japan Iron and Steel Federation, domestic crude steel production totalled 96.333 million tonnes in 2021, up around 15% from the previous year. Meanwhile, statistics from the Ministry of Finance and Trade show Japanese ferrous scrap exports amounted to 479,594 tonnes in November 2021 - down 6.6% month on month and 30.3% year on year. This was the sixth consecutive month in which the total was lower than for the same month in the previous year.

From the end of October 2021, the domestic market entered a downward phase, but it did not fall sharply and the overseas market still felt cheaper than the domestic one. Exports did not grow towards the end of 2021. In November, the top destination was South Korea on 236,000 tonnes (down 2.2% month on month and up 26.6% year on year), followed by Vietnam on 169,000 tonnes (up 29.1% month on month and down 47% year on year).