Japanese scrap exporters have had to cut prices further as demand has been very weak over the past weeks. And this move has been successful with more activity seen recently in some destinations, which has also been connected with slightly lower competition with US suppliers in particular. The latest Kanto export tender has been closed at a much lower level compared to last month, but for a higher volume than earlier, SteelOrbis has learned from the market.
On July 12, the Kanto Tetsugen monthly export tender was closed at the average price of JPY 44,554/mt ($325/mt) FAS, which is down by JPY 9,006/mt from June or $77/mt, taking into account the exchange rate fluctuations. This price corresponds to JPY 45,554/mt ($333/mt) on FOB basis.
This time, in total 25,000 mt of scrap have been sold in the export tender versus 5,500 mt last month. The higher sales volumes in the Kanto auction after two months of weak sales have signalled the increasing competitiveness of Japanese material and improved demand, at least in some destinations. Though buyers from South Korea have still been mainly out of the import market, purchasing locally, demand from Southeast and South Asia has been a bit better.
In particular, out of 25,000 mt sold in the Kanto tender, two lots of 5,000 mt each at the highest bids were traded at JPY 45,031/mt ($329/mt) FAS and JPY 44,480/mt ($325/mt) FAS to Vietnam. This winning price translates to $395-400/mt CFR Vietnam, according to sources, which is in line with the buyers’ price ideas last week, but at least $10-15/mt below the ex-Japan offers seen two weeks ago. The sales price of H2 from Japan to Vietnam are “in line with current Tokyo bay dock prices,” a Japanese source said. Vietnamese customers have resumed purchases of ex-Japan scrap amid the absence of previously available low prices for HMS I/II (80:20) from the US. While two weeks ago they were at $380-390/mt CFR, at the moment offers from the US have been reported at $410-425/mt CFR Vietnam. “Looking at the price difference, Japan has more chances to sell now,” a trader said.
The third lot in the Kanto tender for 15,000 mt of Japanese H2 changed hands at JPY 44,420/mt ($324/mt) FAS for Bangladesh, according to sources.
The SteelOrbis reference price for ex-Japan H2 scrap has settled at JPY 45,000-46,000/mt ($328-336/mt) FOB, down by JPY 1,500-4,000/mt ($11-29/mt) over the past two weeks.