Prices for ex-Japan scrap have been going up this week, which has been fixed in a higher Kanto Tetsugen export scrap tender held today, on July 11. Despite slow demand for scrap in Asia due to maintenances and summer electricity shortage, scrap prices have been edging up as scrap generation has also been slower during summer months.
The Kanto tender average price has been at JPY 49,740/mt ($350/mt) FAS, indicating a rise by JPY 1,573/mt, but in dollars the increase has been very small – just $4.5/mt – due to depreciation of Japanese yen.
This month, only 5,500 mt of scrap has been traded in one lot versus 15,000 mt last month and 20,500 mt a month before. The current quantity has been the lowest this year. According to market sources the material is for the Taiwanese market. “The reason why only one lot (5,500 mt) for the tender is that the scrap generation is less in the summer season and there are long holidays in August in Japan,” a Japanese trader said. Most market sources agree that demand for scrap in S. Korea, Taiwan, Bangladesh has been slower recently, so the current increase is not assessed as a strong sign for the uptrend to sustain.
The Kanto tender FAS price translates to JPY 50,740/mt ($357/mt) FOB.
Today’s Tokyo Bay H2 prices have been at JPY 48,500-50,000/mt FAS, slightly up by JPY 500/mt on the lower end from the previous week. But market sources agree that it will increase in the near future with JPY 48,500/mt FAS will not be available anymore.
The SteelOrbis reference price for ex-Japan H2 scrap has increased to JPY 49,000-50,740/mt ($345-357/mt) FOB, up from JPY 48,200-49,500/mt FOB two weeks ago. The higher end of the range corresponds to the Kanto tender, while the lower end represents the lowest that Japanese suppliers can provide in the current conditions, even though the tradable level in such countries like S. Korea have not improved yet.