Despite the surprise price increase recorded in September in Japan’s Kanto scrap export tender, it is observed that the prices in the tender have once again decreased in October and continued their downtrend which had started in April of the current year. The tender in question was even cancelled a couple of times due to a lack of buyers during the period in question. The latest downward revision in the Kanto tender was expected by SteelOrbis since the general trend of the Asian market has been downward through the past month. While South Korean mills report that the additional pressure they exerted on scrap prices did not work and they were forced to increase their local scrap procurement prices, the previous month’s price recorded in the Kanto tender was far higher than the market price.
On October 12, the Kanto Tetsugen monthly export tender has been closed at the average price of JPY 49,865/mt ($340/mt) FAS, which is down by JPY 1,175/mt or $15/mt from September, taking into account exchange rate fluctuations. This price corresponds to JPY 50,865/mt ($347/mt) on FOB basis. SteelOrbis hears that 5,000 mt of scrap changed hands at JPY 50,120/mt ($342/mt) FAS, while another 5,000 mt was sold at JPY 49,610/mt ($338/mt) FAS.
The total of 10,000 mt sold in the October tender is lower than the previous month’s total of 15,000 mt. The identity of the buyers has not been disclosed by the time of publication, while it is known that last month’s cargo was sent to Bangladesh.
Despite the decrease recorded in the monthly tender, the SteelOrbis reference price for ex-Japan H2 scrap has been impacted positively. The price in the Kanto tender is higher than last week’s bids announced by South Korea’s Hyundai Steel for H2 grade at JPY 48,000/mt ($332/mt - exchange rate at 144.51) FOB. Therefore, the SteelOrbis reference price for ex-Japan H2 scrap has moved up by JPY 3,000/mt on the upper end over the past week to JPY 47,000-51,000/mt ($325-348/mt) FOB. Due to the fluctuation of the Japanese yen against the US dollar, dollar-based prices have increased by $16/mt on the upper end week on week. The lower end of the range is still represented by Vietnam’s purchase prices recorded last week, while the upper end is revised in line with the Kanto tender.
* The dollar-based changes were calculated after taking consideration of the Japanese yen-US dollar exchange rate fluctuation week on week.
$1 = JPY 146.64
