Japanese scrap export prices have increased significantly, by around $20/mt from last week, following the announcements of the results of the Kanto Tetsugen export tender, which was closed with a sharp hike compared to last month. Demand from Vietnam and Bangladesh supports the bullish mood of Japanese suppliers.
On September 9, the average price level for H2 in the monthly Kanto Tetsugen scrap export tender in Japan has reached JPY 29,370/mt ($277/mt) FAS, up by JPY 2,154/mt ($20/mt) compared to last month's results. Though the rise in the tender price is lower than the $35/mt hike in August, market participants said that the increase is a very positive sign, taking into account the long-standing upward trend and buyers’ resistance previously. According to sources, the tender results provide significant support for market sentiment.
The total volume sold in two lots was 20,000 mt, with both tonnages traded at the same price level to Vietnam, sources have said. The average tender price on FAS basis translates to JPY 30,370/mt ($286.5/mt) on FOB basis. The CFR price level in Vietnam is estimated at above $310/mt.
The price level in the Kanto tender is the highest in the market at the moment, with most buyers not ready to accept a sharp increase. The tradable value for H2 which is at JPY 30,000/mt ($283/mt) FOB and above except in Vietnam “is possible in Bangladesh only at this moment. But we need to see if other countries will follow,” an Asian trader said.
Offers from major Japanese exporters have already increased prices to JPY 30,000-30,500/mt FOB, but it is still possible to get JPY 29,500/mt FOB, sources believe. As a result, after the Kanto tender the workable price level for Japanese H2 scrap has surged by JPY 2,000-2,200/mt ($19-21/mt) compared to last week to JPY 29,500-30,400/mt ($278-286/mt) FOB, according to SteelOrbis.