[Ferro-Alloys.com] 

Japan’s exports of scrap steel reached an 11-year high of 9.39 million tons in 2020, driven by increased demand from Bangladesh, Vietnam and Taiwan, according to Japan’s Ministry of Finance. Vietnam is the largest export destination, importing 3.41 million tons, an increase of 54.6% over the same period last year, surpassing South Korea, which ranks first in history. The latter accounted for only 2.96 million tons, down 24.6% from the same period last year, while Taiwan, China, was 1.11 million tons, up 70.9% from the same period last year. Notably, the exports to Bangladesh continued to grow, reaching 867,635 tons in 2020, nearly 2.7 times higher than in 2019.

The increase in exports in 2020 came mainly from the first half of the year, when the volume of scrap steel flowing into export markets increased between February and April, when sea prices fell to their lowest level this year. April 8, the S & P global Japanese H2FOB index fell to a 3.5-year low of $184.0 a tonne. However, the bear market did not last long.

The index reached its highest historical valuation of $427.0/ton on 16 December. South Korean steelmakers, traditionally Japan’s largest importer of scrap iron, were also not immune to the outbreak, leading to South Korean scrap imports falling to more than a 25-year low in 2020. At the same time, Vietnam’s increased crude capacity has increased demand for imported scrap steel, and Vietnam’s domestic supply is insufficient compared with manufacturing countries such as South Korea.

China’s surge in demand for semi-finished steel in the second and third quarters also supported Vietnamese steelmakers' thirst for scrap.