Japan: Bids rise significantly in monthly scrap export tender; domestic prices follow suit

• Kanto Tetsugen scrap export tender fetches bid higher by $20 m-o-m
• Tender prices have hit over one-year high in Sep’20
• Tokyo Steel hikes scrap purchase price by $5

A total of 20,000 t of Japanese H2 scrap was sold at an average price of JPY 29,370/t ($277) FAS basis, at Kanto Tetsugen – Japan’s monthly ferrous scrap export tender for Sep’20. The tender concluded today at a further increased bid price by JPY 2,154 ($20) as compared to the previous tender in Aug’20 was concluded at JPY 27,216/t ($258).

Notably, Kanto bid prices are highest since Jun’19, when the tender result was concluded at JPY 28,967/t FAS basis, as per data maintained with SteelMint.

Following an uptick in the global scrap prices, bids in Kanto tender have risen sharply.

“Entire quantity in today’s auction has been booked by the Japanese trading company and seems it will be supplied to Vietnam. Mills in Vietnam are unable to book decent quantities from the US and Australia due to less cargo availability, so they have actively bid for Japanese scrap. This resulted in a sharp hike in bids”, shared a source with SteelMint.

Japanese H2 scrap prices in Vietnam have increased by around $30/t m-o-m and this week’s SteelMint’s assessment for Japanese H2 bulk stands at $305/t CFR Vietnam.

Currently, Japanese suppliers have already quoted for H2 scrap above JPY 28,000/t level, and now after converting the Kanto tender’s bid price- the H2 offers to South Korea may climb up to JPY 32,400/t CFR level.

JPY is currently trading at 105.9 against $, which was at 106.5 in mid of Aug’20.

The sharp hike confirms the strengthening of Japanese export prices as well as domestic scrap prices, which have both witnessed an increase from last month onwards.

Tokyo Steel hikes scrap purchase price at one of its works – The company has raised scrap purchase price by JPY 500 ($5) at one of its works. Tokyo Steel would pay JPY 26,000/t for H2 scrap delivered to Tahara from Thursday (10th Sep’20), as per new price adjustment, keeping bid price unchanged for the other four plants. Tokyo Steel may increase H2 prices further, especially for Utsunomiya works, following the Kanto tender today.

Tokyo Steel‘s bids for scrap purchase from 10th Sep ’20Price in JPY/t
Source: Tokyo Steel Report