Japanese domestic scrap prices were recently reported by SteelOrbis and are reportedly stable. The Kanto Tetsugen scrap auction is expected to transpire over the next few days.
Comparing the past four months of auction data, results have trended in tandem directionally compared to 2017, although 2018 prices are trending higher than in 2017. Bid prices increased in January, decreased in February, increased in March and decreased in April, the same direction as in 2017. If price trends are to follow year-over-year seasonal results, a downward trend could be expected for the upcoming Tetsugen scrap auction with a rebound in June and continued upward trend in July and August. Except this year has the added factors of Section 232 and strong domestic situation in Japan after a solid 2017 period.
A source noted that Japanese scrap is expected to remain strong domestically and the present stable global scrap trend should provide support in the export market. She added that while the prices may trend down in the auction, though a surprise could happend given the tight scrap market, active domestic prices should remain stable as the downward effect has been factored into the present pricing over the past month, the period since the last auction. In anticipation of strong June auction results which "are supported by market fundamentals," she noted that prices in the Japanese H2 domestic scrap market may begin to firm up. Additionally, Section 232 uncertainty is expected to be reduced as additional information on tariffs and exemptions becomes available.