Japanese scrap export prices rise after bids surge in Kanto tender

Japan’s monthly Kanto scrap export tender for Feb’22 was concluded today which generated active buying interest for the second successive month. A total of 10,000 tonnes (t) of scrap were awarded and the average price for H2 scrap stood at around JPY 55,845/t ($483/t) FAS, moving up significantly by JPY 4,862 ($42/t) m-o-m, SteelMint learnt from sources.

Notably, two Vietnamese buyers remained the winners. The cargoes have been booked in two slots of 5,000 t at JPY 55,850/t ($483/t) and 5,000 t at JPY 55,846/t ($483/t)on FAS basis.

Post-the tender, FOB prices for Japanese scrap exports  have increased by $9-10/t vis-a-vis FAS prices. Hence, the concluded result bid prices are likely to be  higher by around JPY 3,000-3,500/t ($26-30/t) compared to last week’s indicative prices of JPY 53,000/t ($459/t) FOB.

The tender serves as a benchmark for the Japanese scrap export market.

There was a belief that tender bids would be higher due to strong scrap export offers to South Korea, and other prominent Japanese buyers like Vietnam and Bangladesh. 

Key buying countries price ideas 

• Vietnam’s imported scrap market has witnessed a surge in offers after the Tet holidays. Offer indications for Japanese bulk H2 were recorded around $515-520/t CFR Vietnam, registering a sharp hike of $20-25/t against offers recorded a month ago, sources confirmed. Suppliers expect offers to increase further to $530-535/t levels after today’s tender outcome. However, trade remained limited at these levels.
• South Asia’s bulk scrap buyer, Bangladesh, kept away from Japanese bulk cargo bookings for yet another month. Indications for bulk Japanese H2 scrap offers are now at $570-575/t CFR Chittagong, while buyers’ bid prices are lower by $15-20/t. Bangladesh-based bulk scrap buyers consider EU/US-origin bulk cargoes more cost-effective.
• South Korean mills remained quiet so far this week as no bids were heard for Japanese material. As per reports by SteelDaily, Hyundai Steel bid for Russian A3 material at $545/t CFR on 9 Feb’22. Nevertheless, major steel mills, including Dongkuk, SeAH, and Hyundai Steel, have increased bids up to KRW 15,000/t ($12/t) for the domestic material.

Japanese domestic scrap prices up following exports surge

• Tokyo Steel, today, raised scrap buying prices by $17/t after a gap of one month, as per reports.
• Post-revision, the company’s bid price for H2 scrap stands at JPY 55,500/t ($481/t) delivered to Tahara and JPY 55,000/t ($476/t)for Utsunomiya plant.

Prices in JPY/t
Source: Company Reports, Compiled by SteelMint