Ex-Japan scrap export prices are going to increase in the near future. Despite the sharp fall in the Kanto Tetsugen monthly ferrous scrap export auction in Japan today, February 12, the average price level is still higher than the previous FAS prices seen in the market over the last week. However, the local Japanese scrap market has kept going down, containing the optimism in the export segment.
The average price at the latest Kanto Tetsugen tender, closed today, plummeting by JPY 3,915/mt ($35.6/mt) compared to the tender in January to JPY 22,751/mt ($207/mt) FAS. The total volume sold in three lots was 25,200 mt. The FAS price corresponds to JPY 23,751/mt ($216/mt) FOB, sources told SteelOrbis. Such a sharp drop of the price in the auction reflected the fast decrease seen over a whole month, while the tender results were “around $10/mt higher than the latest FAS price,” an Asian trader told SteelOrbis.
The previous export price for ex-Japan H2 scrap, fixed in a contract, was JPY 23,000/mt ($209/mt) FOB, but at the moment suppliers are considering offering at a higher level - at JPY 23,500/mt ($214/mt) FOB at the lowest. There have been no offers to Vietnam at $250/mt CFR for ex-Japan H2 scrap any more. Offers will be “for sure above the last contracts at $250/mt CFR,” a source said.
Nevertheless, the local scrap market has continued to go down this week, which is why most market participants have been very cautious about making short-term forecasts. On February 12, Tokyo Steel has cut scrap purchase prices for all its five plants again by JPY 1,000/mt ($9/mt) to JPY 18,000-20,500/mt ($164-186/mt) delivered.
