Japan: Kanto Monthly Scrap Export Tender for Jan'19 Fetches Bid Lower by USD 6.5

As per recent updates received from sources, ‘Kanto Tetsugen’- Japan’s monthly ferrous scrap export tender for Jan’19 concluded today (11th Jan) in the Kanto region. Total 20,000 MT H2 scrap auctioned through three winning bids presented at an average of JPY 28,775/MT (USD 266), FAS in Jan’19.

On monthly premises, average bid recorded in Jan’19 tender has edged down by JPY 703/MT (USD 6.5) against the average bid at JPY 29,478/MT (USD 272), FAS in Dec’18. Monthly around 20,000 MT of H2 is auctioned through this tender. Also, it is to be noted that FoB prices for the same are higher by around USD 9-10/MT than FAS (free alongside ship) prices.

In today’s tender, the first winning bid fetched 5,000 MT of H2 at JPY 28,820/MT, FAS, the second place fetched 5,000 MT H2 at JPY 28,800/MT, FAS and third winning bid retained remaining 10,000 MT of H2 at JPY 28,740/MT, FAS.

What can we infer from Kanto Tender results?

According to sources, the average bid is recorded at similar levels in the market on FoB basis. The equivalent FoB price of the same stands at JPY 29,775/MT, FoB Japan. Which is similar to import bids for Japanese H2 by South Korean leading steel mills.

On the other side, average bids remained lower by around JPY 1000/MT against Tokyo steel’s H2 purchase price at Utsunomiya work at JYP 31,000/MT in the same Kanto region. It is expected that H2 purchase bids in the East Asian market would remain more or less steady in the near terms.

What happened in Japan’s domestic and export scrap market in last 1 month?

Japan’s leading EAF steelmaker Tokyo Steel witnessed scrap prices on a downtrend at all works and lowered prices by a total JPY 500-1500/MT (USD 5-14) for domestic scrap in a months’ time.

South Korean steelmakers continued buying limited scrap from Japan amid high inventories in hand. Hyundai Steel has observed stability in bids for Japanese H2 at JPY 29,500/MT since last 4 weeks’ after lowering last by JPY 500/MT on 14th Dec’18.

JPY appreciated sharply by around 4.5% against USD. USD/JPY exchange rate stands at 108.3 today which was at around 113.4 levels on 11th Dec’18. This could have supported export offers maintained at stable levels in Japan.