Japan: Kanto Scrap Export Tender for Aug'19 Fetches Bids Lower by USD 27
‘Kanto Tetsugen’- Japan’s monthly ferrous scrap export tender for Sep’19 was concluded today (11th Sep’19) in the Kanto region. Total of 22,100 MT of H2 scrap was awarded at an average of JPY 24,849 /MT (USD 230), FAS, as compared to JPY 27,714/MT in Aug 2019, witnessing a sharp fall of JPY 2865/MT (USD 27) on a monthly basis, SteelMint learned from market sources.
Monthly around 20,000-25000 MT of H2 scrap is auctioned through this tender. Notably, the FoB prices for the same are higher by around USD 9-10/MT than FAS prices.
Amid continuous downturn in the domestic Japanese scrap market since April’19, this is the 6th successive monthly fall witnessed in the average bids, dropping in total by around JPY 9161/MT (USD 85) since the highest bid of JPY 34,010 observed in Mar’19.
What can be inferred from Kanto’s result in Aug’19?
It was being expected that the average bids in Sep’19 would drop considerably, as the domestic scrap prices had dropped by around JPY 2500/MT since the last month's bid. Notably, the fall in September’s winning bid was the steepest, as compared to the last 5 price drops.
Major Japanese EAF steelmakers like Tokyo steel had also observed 6-7 price cuts across their plants, lowering their purchase bids by JPY 2000-2500/MT during this time period. Domestic finished steel demand remaining poor, in addition to the downturn in the global market, are likely to keep the market sentiments weak for the coming days.
The sharp fall in domestic prices also reflected in the dropping of export offers of Japanese scrap to major overseas buyers. South Korean major steelmaker Hyundai steel did not bid for Japanese scrap in August on high export offers, while it reduced its purchase bids earlier this month to JPY 26,000/MT, FoB amid expectation of further price cuts, while other steel mills followed the suit. Export offers to other South East Asian markets have also dropped significantly in the last couple of weeks.
After appreciating to 105 levels in the Aug’19, the Japanese Yen has again depreciated to 107 levels against USD, however the currency is still relatively stronger now as compared to earlier half in 2019.
source: SteelMint
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