As per recent updates received from sources, ‘Kanto Tetsugen’- Japan’s monthly ferrous scrap export tender for Apr’19 concluded today (10th Apr) in the Kanto region. Total 10,100 MT of H2 scrap has been auctioned in two winning bid presented at an average of JPY 32,300/MT (USD 291), FAS in Apr’19.
On monthly premises, average bid recorded in Apr’19 has moved down sharply by JPY 1,710/MT (USD 15) against the average bid at JPY 34,010/MT (USD 306), FAS in Mar’19. Monthly around 20,000 MT of H2 is auctioned through this tender. Also, it is to be noted that FoB prices for the same are higher by around USD 9-10/MT than FAS (free alongside ship) prices.
According to SteelDaily’s report, in today’s tender, the first winning bid fetched 5,100 MT of H2 at JPY 32,300/MT, FAS by Shinko Company, followed by 2nd place fetched 5,000 MT H2 at JPY 32,300/MT, FAS.
Total volume auctioned remained low successively for the second month against usual of 20,000 MT monthly. The equivalent FoB price for Kanto tender’s average bid stands at around JPY 33,300/MT, FoB Japan. Bids fetched are expected to have achieved an expected current market level.
Why are Japanese scrap prices falling in recent past?
According to sources, participants were already expecting that the average bid in Apr’19 would fall following a sharp correction in global scrap prices. Japanese domestic scrap prices also moved down amid slow demand and increasing supply while South Korean importers returned to Japanese scrap lowering their bids sharply.
Japan’s leading EAF steelmaker Tokyo Steel observed a total fall by JPY 2,500/MT (USD 23) in scrap purchase price at Utsunomiya work in Kanto region since mid-Mar’19 amid slow local demand. The equivalent FoB price of the tender stands slightly higher by JPY 800/MT against Tokyo steel’s H2 purchase price which is presently at JYP 32,500/MT at Utsunomiya works.
Recently South Korean steelmaker Dongkuk Steel contracted Japanese H2 at JPY 32,500/MT, FoB. South Korea’s largest importer Hyundai Steel’s bid placed last week for H2 stood at JPY 33,000/MT, FoB Japan which seems in line with Kanto’s result.
Following tender’s result fetched above than expected, prices are likely to remain supportive ahead of Japanese Golden week holidays scheduled during 27th Apr-6th May’19.
JPY was appreciated to levels of 109.9 against USD during closing Mar’19 however it depreciated again to 111.7 level towards the first week of Apr’19. USD/JPY exchange rate stands at 111.1 today which was around similar levels a month back.
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