The pressure on Japanese scrap prices has continued to be observed over the past week, but Japan-based scrap sellers have started to show some resistance to buyers’ desires for further sharp cuts to prices, with the support they receive from their domestic market. The anticipated Kanto tender, which was expected to give a signal for the future trend of Japanese scrap prices, has failed to result in actual sales amid low bids.
Accordingly, the monthly Kanto Tetsugen scrap export tender was held on December 9, with its highest bids from traders at JPY 50,000/mt ($441/mt) FAS. “No bid higher than this was given, hence there was no winner,” a trader stated. The FAS prices in the Kanto auction translate to JPY 51,000/mt ($449/mt) FOB. As SteelOrbis reported previously, on November 10 the highest bids from traders in the Kanto tender were at JPY 51,200/mt FAS ($451/mt) and JPY 51,096/mt ($450/mt) FAS. This tender had also yielded no results.
The Kanto tender has failed to create some actual sales as “the Tokyo Bay FAS price for H2 is at JPY 53,000-54,500/mt ($467-480/mt),” a trader reported.
Japanese sellers have accepted Hyundai’s low bids announced last week, but sold very small tonnages to South Korea. “There is a small space left for a decrease for Japanese scrap, maybe even a stabilization is possible for Japanese prices for South Korea,” a source commented.
Having reduced its bid prices last week, South Korean mill Hyundai Steel has bought only 10,000 mt of ex-Japan scrap in total, 5,000 mt reportedly consisting of H2 grade scrap. As SteelOrbis reported on December 2, Hyundai Steel reduced its bid for ex-Japan H2 grade to JPY 47,500/mt ($419/mt) FOB, while its bids for HS and shredded scrap dropped to JPY 56,000/mt ($493/mt) FOB and JPY 53,000/mt FOB ($467/mt), respectively. “Domestic scrap flow in South Korea is good, hence we do not need to pay higher levels for ex-US scrap. But I think the most recent bids for Japanese scrap were a bit low, and so I am not sure whether there will be another drop,” a South Korea-based source reports.
It is also reported today, December 9, that Tokyo Steel has cut its domestic scrap procurement prices further for two plants and its new price levels for H2 scrap are now in the range of JPY 51,000-54,500/mt ($449-480/mt) delivered.
The SteelOrbis reference price for export H2 scrap from Japan has remained at last week's level of JPY 47,500-49,500/mt ($418-436/mt) FOB.