Japan: Bids in Kanto scrap export tender higher than expectations, outlook positive

• Kanto Tetsugen scrap export tender fetches bid lower by $52 m-o-m
• Japanese scrap export prices likely to go up by $15-20

Around 15,000 t of H2 scrap was sold at Kanto Tetsugen – Japan’s monthly ferrous scrap export tender for Feb’21, SteelMint learned from its trade channels. The tender concluded today at an average price of JPY 39,271/t ($375) FAS, registering a sharp fall by JPY 5,480/t ($52) as compared to Jan’21. Following a downtrend in the global scrap prices, bids in Kanto tender have dropped considerably, however, the prices are higher than the expectation, SteelMint understands.

Monthly, around 15,000-20,000 t of H2 scrap is sold through Kanto tender auction and the FoB prices for the same are higher by around $9-10/t vis-a-vis FAS. The tender serves as a benchmark for the Japanese scrap export market.

JPY is currently trading at 104.5 against $ which was JPY 104 a month ago.

Japanese scrap export offers up- Japan’s ferrous scrap export offers to Vietnam and Bangladesh are likely to move up by $15-20 after the price changes in today’s Kanto tender result, sources have shared to SteelMint.

Currently, offers for bulk Japanese H2 would be quoted around $418-420/t CFR to Vietnam and $420/t CFR to Bangladesh.

Vietnam market is quiet ahead of Tet holidays, whereas, Bangladesh based bulk buyers are waiting for fresh offers. Japanese suppliers are likely to quote fresh offers after Tet and Chinese New Year holidays.

South Korean buyers mostly silent this week– South Korean buyers are mostly quiet as this week bids have not been presented so far. Japanese scrap export prices to South Korea are currently being offered at JPY 37,000/t to JPY 39,000/t levels, however, no deals were concluded.

Outlook– Japan’s Tokyo Steel had made a slight price correction for four of its plants (except Utsunomiya) effective from 3rd Feb’21. The company is now paying, JPY 38,000/t ($362) for H2 scrap price delivered at Tahara plant. The company is likely to adjust its domestic scrap purchase price in the coming days. The purchase price in Utsunomiya factory in the Kanto region has already bottomed out early in the month at JPY 29,000/t DAP Utsunomiya. Prices are expected to rebound in the near term.