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JAPAN DATA: 2021 ferrous scrap exports fall 22% to 7.30 million mt

Japan’s ferrous scrap exports fell 22.1% on the year to 7.30 million mt in 2021, due to a recovery in domestic scrap demand from the pandemic’s hit, latest customs data showed.

South Korea was the largest destination for the country’s exports — at 3.09 million mt, up 4.5% on the year — overtaking Vietnam, the top receiver in 2020.

Volumes to Vietnam fell 34.1% from 2020 to 2.25 million mt while Taiwan received 0.59 million, down 46.5% on the year.

Vietnam’s dependency on Japanese volumes saw a sharp decline in H2 2021, when it contracted 45.4% as compared to H1, weighed down by pandemic-related lockdowns and uncompetitive cost of importing scrap against thin steel margins.

On the contrary, volumes to China surged 24 folds on the year to 401,136 mt, as the country reopened for imports following a two-year ban on the commodity.

In Bangladesh, despite growing appetite of the domestic steel industry, scrap exports from Japan contracted 60.5% on the year at 341,950 mt in 2021. This was in large part due to the “overly-expensive” freight prices, as cited by sources, and destination congestions — making the trade uncompetitive for both buyers and sellers.

The decline in 2021 exported scrap volumes was also attributed to strong domestic demand from both electric arc and blast furnace steelmakers in Japan, as they were churning out more steel to make up for the lost ground following production cuts in 2020. As a result, steel prices in the country not only recovered from 2020 lows but also soared to highest levels in more than a decade.

Higher domestic demand was also exacerbated by carbon-reducing goals set by blast furnace-based steelmakers, with them snapping up heavier grades of scrap as it was deemed the easiest way to circumvent higher carbon footprints.

2021 saw Japan churn out 15.8% more crude steel year-on-year, reaching 96.33 million mt, data from the Japan Iron & Steel Federation showed, with recovery seen in the downstream manufacturing sectors.

Of the 2021 crude steel output, conventional blast furnaces accounted for 71.95 million mt, up 16% from 2020, while electric arc furnaces were responsible for 24.39 million mt, up 15.4% on the year.
Source: Platts

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