This is 2nd consecutive price hike for scrap purchase in Kanto tender
Kanto Tetsugen’- Japan’s monthly ferrous scrap export tender for Dec’19 was concluded today (11th Dec’19) in the Kanto region, SteelMint learned from market participants, observing a second successive rise in bids since Nov19. A total of 23,000 MT of Japanese H2 scrap was awarded at an average of JPY 25,804/MT (USD 237), FAS, as compared to JPY 24,307/MT (USD 223) in Nov 2019, witnessing a significant rise JPY 1,497/MT (USD 14) in the winning bids on a monthly basis.
The FoB prices for the same are higher by around USD 9-10/MT than FAS prices. Monthly around 20,000-25000 MT of H2 scrap is auctioned through this tender. Notably, only 23,000 MT of the material was bid this month, as compared to 30,000 MT in the previous month.
This increase in bid price has confirmed the rising trend in the Japanese scrap market. The winning bid’s price has risen by a total of JPY 3511/MT (USD 32) in the last 2 months, after bottoming out in Oct’19 at JPY 22,293/MT FAS.
The current domestic price levels are still around JPY 1500/MT lower than the export offers for Korea, indicating that further rise in export offers in the coming days, with major steelmakers like Tokyo Steel likely to announce further price hikes.
In the last week, most exporters of Japanese scrap to overseas buyers, who had withheld their offers, waiting for the Kanto tender to clear the direction of price trend, are expected to increase their offers, whereas buyers in Korea and Vietnam might have to increase their bids too.
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