Kanto Tetsugan – Japan’s monthly ferrous scrap export tender for the month of June’20 has concluded today (10th Jun’20). A total of 21,000 MT of Japanese H2 scrap was awarded at an average price of JPY 26,360/MT (USD 246) FAS, as compared to JPY 22,476/MT (USD 209) in May’20. This month’s average bid sharply climbed up by JPY 3880/MT (USD 36) against last month’s bid.
After rising by around USD 17/MT last month in May, now the bids have shot up by another USD 36/MT and is almost at a 6-month high level, more-or-less at the same level as bids in January’20. Separately, the 2 winning bids were awarded 6,000 MT at JPY 26,710/MT and 15,000 MT at JPY 22,220/MT FAS, for Japanese H2 scrap.
The sharp hike confirms the strengthening Japanese export prices as well as domestic scrap prices, which have both witnessed an increase of around up to 37% since last month onwards.
On one side, Japanese suppliers had already started quoting JPY 25,000-25,500/MT FoB Japan for H2 scrap, to South Korean buyers, in a series of price hikes throughout, while on the other hand, sice May last week onwards, domestic prices too followed the rally, with Tokyo Steel hiking their scrap purchase bids 6 times since 22nd May, increasing bids by over JPY 5,000-7000/MT in this short span, with H2 price to Utsunomiya plant at JPY 25,500/MT DAP, from JPY 18,500/MT levels till mid-May.
With increasing demand from overseas buyers including Vietnam, Taiwan and Korea, as well as an improving domestic market, the market is expecting Japanese scrap prices to remain on the higher side in the coming days. Also tight scrap availability in Japan is a major concern which is holding prices high.
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