Japanese ferrous scrap exports rose by 28pc in June from May to 883,157t, boosted by increased price competitiveness against US exports in Asia.

The increase in exports was also driven by increased procurement from the country’s main buyers from mid-April to mid-May. Aggressively competitive prices and shorter delivery times made Japanese scrap Asian buyers’ main choice at that time.

South Korean steelmakers imported 261,613t of ferrous scrap from Japan in June, up by 46pc on the month. Total South Korean imports from Japan for the first half of the year were down by 24pc to 1.63mn t, partially reflecting the Covid-19 pandemic’s impact on the Korean economy.

Weak domestic demand for finished steel caused South Korean mills to reduce production and drop imported scrap procurement to a low level. They instead focused on domestic scrap purchases to satisfy the bulk of their requirement.

Exports of Japanese scrap to Taiwan rose by 20,788t from May to 158,334t in June. Exports in January-June increased by 189pc to 700,012t. Taiwanese steelmakers increased purchases in the first half of the year because of more limited availability from the US amid the Covid-19 pandemic. US scrap exporters were initially affected in February-April by a global shortage of containers caused by lockdown measures in China, followed by disruptionw to scrap collection and processing as the virus spread across the US during the spring.

Vietnam was the largest export market for Japanese scrap in June. It received 264,498t, an increase of 54pc from May. Japanese scrap exports to Vietnam rose by 83pc on the year in January-June to 1.57mn t.

Vietnamese steelmakers capitalised on competitive Japanese scrap prices to restock their inventories ahead of the summer. Weak domestic demand in Vietnam meant that smaller mills were cautious on the volumes they purchased, but larger mills with stronger overseas orders were more aggressive.

Japan-Vietnam trading activity slowed towards the end of May after Japanese export offers started to rise in line with tighter availability caused by a resurgence in competition from Japanese steelmakers.

Bangladeshi steelmakers’ receipts of Japanese scrap fell by 51pc on the month to 43,659t in June but were up by 313pc on the year to 394,851t for the first half of 2020. Demand for Japanese cargoes from Bangladesh has remained steady over July and August.

Malaysian demand for Japanese scrap has also risen sharply this year, with sales of semi-finished products to China more than offsetting weak domestic demand for long products. Japan exported 136,355t to Malaysia in June, an increase of 31pc from May. January-June exports to Malaysia rose by 364pc on the year to 370,481t. Malaysian demand will continue to be strong as long as the country can keep exporting semi-finished steel to China.