Japan’s monthly Kanto Tetsugen ferrous scrap export tender for May 2022 was conducted today. Lower bids from participants resulted in the tender remaining inconclusive. It may be recalled that the tenders of November and December months of 2021 also remained inconclusive.
The drop in bids from Vietnam, falling global scrap prices and absence of firm bids from South Korea have kept Japanese scrap prices under pressure. Due to Japan’s Golden Week, it was difficult to have feasible bids.
Additionally, Japanese Yen has depreciated to nearly 20-year low. Currently, JPY is being traded at 130.02 against the dollar.
Last month, a total of 10,000 tonnes (t) of scrap was awarded and the average price for H2 material stood at around JPY 67,010/t ($534/t) FAS, higher by JPY 3,500/t ($28/t) m-o-m. The price hit a multi-year high which was last seen in 2008, SteelMint learnt. FOB prices for Japanese scrap exports went higher by $9-10/t vis-a-vis FAS prices.
Japanese scrap market overview:
- South Korea away from Japanese market: South Korea’s largest scrap importer Hyundai Steel remained quiet and did not bid last month. Hence, the absence of buyers is likely to pull down Japan’s scrap export offers.
On the other hand, South Korea’s major mills like POSCO, SeAH, Dongkuk, and Hyundai Steel have cut their domestic scrap purchase prices by KRW 10,000/t ($8/t), as per Steel Daily.
- Vietnam buyers mostly quiet: Vietnam’s imported scrap market remained largely quiet with buyers not showing any interest in Japanese material throughout the month. Subdued demand from domestic and overseas markets kept Vietnam buyers away from the Japan market. Price indications for bulk H2 were assessed at $550/t CFR Vietnam towards the beginning of this week. Suppliers are likely to quote fresh offers for Japanese H2 material below $500/t CFR levels, SteelMint learnt.
- Bangladesh buyers look for alternatives: After having booked two bulk cargoes recently from USA and Australia/NZ at favourable prices, major mills are showing less interest in booking Japanese bulk cargoes. Bulk offers from Japan are still on the higher side while Bangladesh buyers are getting plenty of offers from other origins. Thus, bulk cargo buyers remained silent in the Japanese market over the last few months.
Tokyo Steel further reduces scrap buy prices: Tokyo Steel has again cut scrap buying prices for another week. The company has reduced bids by JPY 1,500/t ($11/t) for all its steelworks, effective 12 May. Post-revision, the company’s bid price for H2 scrap stands at JPY 63,000/t ($484/t) delivered to Tahara, while prices for Utsunomiya are at JPY 64,000/t ($492/t). The inconclusive Kanto scrap export tender put pressure on domestic scrap prices.
Tokyo Steel scrap purchase price effective from 12th may
Outlook: Japanese scrap export offers are likely to go down further amid limited bids and inquiries from buyers as they are looking for other prospective scrap suppliers.
.jpg)
Leave a Reply