The monthly Kanto Tetsugen scrap export tender in Japan has not been closed in May as bids have dropped far below the level acceptable to suppliers and as local prices are still far higher. The tender results have been awaited by market sources as they are looking for the trend to settle.
According to the information from market sources, the highest bid in the tender for 5,500 mt of H2 scrap, held today, May 11, was JPY 58,010/mt ($445/mt) FAS. This is drastically lower than the tender results last month, down by JPY 9,000/mt or $69/mt. As a result, suppliers have assessed the current bids as too low and since local prices are still far above JPY 60,000/mt, they have decided to skip export sales this month. The H2 scrap purchasing price of Tokyo Steel at the Utsunomiya plant in the Kanto area is at JPY 64,000/mt ($491/mt) even after the latest decline.
The lowest bid in the Kanto tender corresponds to JPY 59,010/mt ($453/mt) on FOB basis. This is equivalent to around $510/mt CFR for Vietnam, much lower than the previous contract at $550/mt CFR reported a week earlier.
The SteelOrbis reference price for ex-Japan H2 scrap has been lowered to JPY 64,000/mt ($491/mt) FOB for now, down from JPY 64,000-68,000/mt ($491-521/mt) FOB last week. The current level is indicative as no new deals have been reported so far and the overall number of offers has been limited and lower quotations could be settled in the market by the end of the current week.