On June 12, SteelOrbis reported the June H2 scrap average selling price at JPY 25,525/mt ($232/mt) FAS or near JPY 27,000 ($246/mt) FOB Tokyo Bay. The June prices trended up from the May auction prices.
Through June, several large South Korean steelmakers continued to bid below auction results with bids at JPY 24,000/mt ($216/mt) FOB Tokyo Bay for August and September deliveries, but increased their bid levels by JPY 2,000-2,500/mt toward the end of June to engage traders. The most recent South Korean H2 buying prices were at JPY 26,500 ($233/mt) FOB Tokyo Bay.
According to July 11 auction results, the top three bids averaged JPY 28,010/mt ($246/mt) FAS or JPY 29,000/mt ($255/mt) FOB Tokyo Bay for 20,000 mt of H2 scrap. The auction had 24 bids for a total of almost 150,000 mt of scrap at an average bid price of JPY 27,350/mt ($240/mt) FAS. The average selling price compared to June increased JPY 1,825/mt ($16/mt) but only $8/mt due to currency fluctuations.
Given the initial expectation for the July scrap auction to decrease slightly due to seasonality, the upward trend for the late-August and early-September shipments in the auction point to updated expectations of continued increases in scrap prices.
Japanese H2 scrap sales were heard trending up to Vietnam from $270/mt CFR in late June to most recently at $275/mt CFR. The latest prices translate to approximately JPY 27,500/mt ($242/mt) FOB Tokyo Bay. The recent Vietnam deals including the auction results are expected to push South Korean bid prices up.
With increased domestic H2 prices in Japan of up to JPY 27,500/mt ($242/mt) delivered to mills and the purchase of H2 scrap for export at up to JPY 26,500/mt ($232/mt) FAS, H2 exporters are expected to firm offers up.
$1=JPY 109.81, 6/12/2017
$1=JPY 111.27, 6/22/2017
$1=JPY 113.74, 7/11/2017