Japanese steel scrap exporters are facing acute problems in sourcing vessels in which to make shipments, leading to an oversupply of scrap at exporters' yards which in turn is driving down prices, market sources told Fastmarkets on Wednesday March 17.
Rising freight rates have been
inflating cfr-basis scrap and steel prices across Asia in recent weeks but the situation in Japan is now so severe that it has started to suffocate fob-basis scrap prices.
"Exporters have high inventories now. It is difficult for them to find a vessel, and freight is expensive," a Japanese scrapyard source said.
"If vessels do not come to Japan, inventories will be driven higher and exporters will have to reduce sales prices because they will have no space in their yards," he said. "It's crazy right now. But we don't think this can continue over the long term because no one will be able to do business properly."
Trading sources shared a similarly dim view of the current situation.
"Some exporters in...