Japan: Bids in monthly Kanto scrap export tender in Nov’20 climb to 1.5 years high

• Bids in Kanto scrap export tender increased by $21 m-o-m in Nov’20
• Tighter supplies continue to push up scrap offers further
• Tokyo Steel hikes scrap purchase price up to JPY 1,500 ($14) today

A total of 20,000 t of Japanese H2 scrap was awarded at an average price of JPY 30,605/t ($291) FAS basis at Kanto Tetsugen monthly ferrous scrap export tender concluded today for the month of Nov’20. Bids have hit 1.5-years high since Apr‘19, as per data maintained with SteelMint.

The tender was concluded in slots of 15,000 t and 5,000 t at JPY 30,717/t ($ 292) and JPY 30270/t ($ 288) respectively. As per the sources the cargo has been booked for Bangladesh and Vietnam respectively. The weighted average bid has increased by JPY 2,199/t ($21) as compared to the previous month, which was concluded at JPY 28,406 /t FAS level in Oct’20.

Monthly around 20,000-25,000 t of H2 scrap is auctioned through Kanto tender and the FoB prices for the same are higher by around $9-10/t than FAS prices.

SteelMint’s analysis-

• Japanese scrap prices are likely to increase further after today’s Kanto results
• Hike in global prices due to tighter scrap availability has resulted in hike in bids
• Hyundai Steel- South Korea’s major steelmaker, presented bids for Japanese scrap purchase last week. Bids observed a hike of JPY 2,500/t ($24) as compared to the bid presented on 15th Oct’20.
• Japanese scrap export offers to Vietnam and Bangladesh have increased significantly this week. Bulk H2 scrap offers are heard around $325-330/t CFR Chittagong levels

Tokyo Steel hikes scrap purchase prices sharply –

Japan’s Tokyo Steel has immediately hikes prices up to JPY 1,500/t ($14) for all of its plants, effective from tomorrow (12th Nov’20). Notably, Utsunomiya factory which is in Kanto region observed a price adjustment after almost a gap of eight weeks since mid-Sep, to keep balance in bid prices with other steelworks, the company has kept the purchase price unchanged for the time being. While the price for Tahara plant hovering around one year high.

After this price revision, the company would pay JPY 29,500/t ($280) for H2-scrap delivered to Tahara in central Japan, JPY 29,000/t ($275) for Okayama, and JPY 26,500/t ($251) for Utsunomiya plant. Prices for Kyushu works and Takamatsu steel Centre have now risen to JPY 28,500/t ($270) and 28,000/t ($266) respectively.

Price in JPY
Source: Tokyo Steel report