Japan’s bellwether monthly Kanto Tetsugen ferrous scrap export tender for July 2022 was concluded today. A total of 25,000 tonnes (t) of Japanese H2 scrap has been awarded at an average price of JPY 44,554/t ($324/t) FAS, SteelMint learnt from sources. Prices have fallen to over one year low as per data maintained with SteelMint. Interestingly, this time mills have booked higher quantities, as offers fell.
The highest bid was awarded for just 5,000 t at JPY 45,031/t, followed by the second winning bid of around JPY 44,480/t for another 5,000 t, while the third winning bid was of JPY 44,420/t for 15,000 t of Japanese H2 material. Sources revealed that the materials have been booked by Vietnam and Bangladesh-based mills.
The tender prices have fallen considerably to JPY 9,006/t ($66/t) levels from JPY 53,560/t ($399/t) fetched in June 2022. Japanese scrap export offers are likely to drop further on the back of lower bids received in the Kanto tender, SteelMint understands.
Notably, the Kanto tender serves as a benchmark for the Japanese scrap export market. Notably Japanese currency Yen has depreciated to 137.3 against 134.4 a month ago in June.
Market overview
- Vietnam buyers may return to Japanese market: In today’s tender result, Vietnam-based buyers may have booked a bulk cargo, considering the drastic fall in prices, sources believe. Fresh offers for Japanese H2 bulk cargoes were at $390-395/t CFR, while buyers were bidding lower. Hence, the country’s steel mills and buyers are likely to return to the Japanese market for more bulk bookings.
Amid heavy rainfall in many parts of Vietnam, imported scrap buyers desisted booking fresh cargoes from overseas suppliers.
- Bangladesh mill books one bulk cargo: Bangladeshi buyers had been away from booking any bulk cargoes from Japan in the last few months. But a major mill has bid for Japanese H2 material in this month’s Kanto tender. The cargo of 15,000 t of H2 material has been booked at JPY 44,420/t (323/t) FAS basis. Before this, mills were actively booking US-origin bulk cargoes at lower prices. However, Japanese suppliers have yet to quote firm offers for the next round of bookings.
- South Korean mills quiet: South Korean steel mill POSCO cut its domestic scrap purchase prices for all grades to its Gwangyang and Pohang steelworks, as per Steel Daily. Mills have slashed purchase prices of all grades of scrap by KRW 20,000/t ($15/t).
Hyundai Steel and Dongkuk Steel also lowered domestic scrap prices for all grades twice this week by up to KRW 25,000/t ($20) last week.
- Tokyo Steel lowers scrap buy prices by up to $11/t: Tokyo Steel, Japan’s largest EAF steelmaker, reduced scrap purchase prices for the first time this week. The company has reduced bids by JPY 1,500/t ($11/t) for all its plants. After adjustment, bid prices for H2 scrap were JPY 49,500/t ($361/t) supplied to the Tahara plant and JPY 48,500/t ($353/t) delivered to Utsunomiya works in the Kanto region.
Outlook: Japanese ferrous scrap export prices may further correct marginally considering lower bids in the Kanto tender.
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