Though some negative moods have started to emerge in the Japanese scrap market over the past week, the recent sharp increase by $58/mt in the latest Kanto Tetsugen export tender has supported the market prices.
On January 13, the monthly Kanto Tetsugen scrap export tender in Japan was closed at the price of JPY 44,751/mt ($431/mt) FAS, up by JPY 6,041/mt ($58/mt) compared to last month's auction.
Only one lot of 15,000 mt has been confirmed as being sold at this level to Bangladesh, while two other lots of 6,000 mt each, which received bids at JPY 44,210/mt and JPY 44,110/mt, have not been finally approved. Some sources report that sellers are worrying about possible disruptions of shipments due to the spread of Covid-19. But “even during a possible lockdown, the industry would still operate as usual… Scrap collectors clearly said that the Tokyo area could not be closed,” a Japanese trader said.
The Kanto tender price on FAS basis translates to JPY 45,751/mt ($440.5/mt) on FOB basis. This level is above $480/mt CFR Bangladesh.
The SteelOrbis reference price for H2 scrap from Japan has been settled at JPY 44,000-45,750/mt ($424-440.5/mt) FOB, with the higher end of the range up by JPY 750/mt ($7/mt).
Lower appetite for local scrap in Japan has put pressure on sentiment in the export scrap market. Tokyo Steel has cut its purchase price for H2 scrap at Utsunomiya by JPY 1,000/mt ($9.6/mt) after a very long-lasting uptrend - to JPY 42,000/mt ($404/mt). Prices for its other four assets have not been changed and have remained at the range of JPY 41,000-43,000/mt ($395-414/mt). All prices are delivered and effective from January 14.