Prices for ex-Japan scrap have posted sharp rises with the closure of the Kanto export tender, with an increase of more than $50/mt compared to the previous month. Strong demand and rising bids in Vietnam are expected to support sharp price rises for ex-Japan material, SteelOrbis learned from market sources.
On May 11, the monthly Kanto Tetsugen scrap export tender in Japan was closed for three lots of 15,150 mt of H2 scrap in total. The first and the highest bid was for 5,000 mt at JPY 49,279/mt ($454/mt) FAS, up by JPY 5,899/mt or $54/mt compared to an auction in April. The second lot for the same volume has been sold at JPY 49,229/mt ($453) FAS, while the third one consisting of 5,150 mt of scrap was sold at JPY 48,015/mt ($442/mt) FAS, SteelOrbis has learned from market sources. “Some of these cargoes are going to Vietnam,” a Japanese trading source said.
The price increase has been quite expected in the market, but these results have surpassed expectations. The Kanto prices on FAS basis translate to JPY 49,015-50,279/mt ($451-463/mt) FOB. This means that on a CFR basis they will hit and exceed $500/mt in Vietnam. “The strong billet market in China gives solid support [to the import scrap market in Vietnam],” a source said.
The latest SteelOrbis reference price for ex-Japan H2 scrap was at JPY 45,000-46,000/mt ($414-424/mt) FOB. It will settle at a higher level closer to JPY 50,000/mt FOB later this week, sources said.