While the international scrap market is stabilizing, Japanese scrap exporters have been trying to offset the depreciating Japanese yen for some time by increasing their prices, though, with the fluctuation of the exchange rate continuing, they have not succeeded in offsetting the depreciation of the yen. In the ex-Japan Kanto scrap tender, prices have increased in Japanese yen (by JPY 3,500/mt) but the dollar-based quotations have not increased compared to the previous month. Additionally, after the result of the Kanto tender, the main EAF-based steel producer in Japan, Tokyo Steel, has also increased its scrap procurement prices on yen basis.
A total of 10,000 mt of H2 scrap has been priced at JPY 67,010/mt ($533/mt) FAS in the latest Kanto tender. In the Kanto tender held on March 9, the highest bid for this grade was at JPY 63,510/mt FAS or $548/mt FAS, with the yen standing at 115.78 to the dollar. Accordingly, despite the increases observed on JPY basis, the dollar-based quotations have decreased as the Japanese yen depreciated by more than five percent over the course of March and continues to depreciate in April. The buyers of the scrap in the latest Kanto tender are believed to be from South Korea, a SteelOrbis source commented.
The current FAS price in the Kanto tender corresponds to JPY 68,010/mt ($541/mt) FOB.
As a result, the SteelOrbis reference price for ex-Japan H2 scrap has increased by JPY 1,000/mt on the upper end to JPY 66,000-68,000/mt ($525-541/mt) FOB. However, the decrease in the dollar-based price by $12/mt on the lower end is represented by Hyundai’s bids for Japanese scrap last week, while the dollar-based prices has declined by $4/mt on the upper end as compared to SteelOrbis’ report published on April 7.
$1 = JPY 125.6