On September 11, SteelOrbis reported that the September Kanto Tetsugen scrap auction prices were slightly softer in both domestic and dollar terms compared to August results.
Sources inform SteelOrbis that the recent October Tetsugen scrap auction resulted in withdrawn export offers by sellers on low bids, which has not happened since June 2004. According to sources, the highest bids this month were at JPY 34,900/mt ($311/mt) FAS, or approximately JPY 35,900/mt ($320/mt) FOB, slightly higher by $2/mt in FAS terms than the high bid H2 average price of JPY 34,486/mt ($309/mt) FAS in September, but lower than expected by sellers given their higher domestic prices. Export offers are reportedly at JPY 36,500-36,800/mt ($325-328/mt) FOB.
In a year-on-year analysis, the Tetsugen H2 scrap high bid average is higher by JPY 4,347/mt this month compared to the average of the top three bids of JPY 30,553/mt ($273/mt) FAS in October 2017. Year-on-year H2 scrap bids increased $38/mt.
A source noted that the market is uncertain in regards the direction of Japanese scrap for the remainder of Q4 as domestic demand is strong, global scrap inventories are maintaining prices that are relatively stable, and historically November and December Tetsugen scrap auctions have trended sideways to up, but foreign buyers are showing hesitation.
USD = JPY 112.12 (Oct 10, 2017)
USD = JPY 111.58 (Sep 11)
USD = JPY 112.33 (Oct 11)