Prices for ex-Japan scrap in today’s Kanto tender have dropped, by almost JPY 3,000/mt, as had been expected due to the negative sentiments globally, the weak demand in Asia and the Turkish market settling at $368-371/mt CFR last week.
In the Kanto export tender, the highest bid was at JPY 50,100/mt FAS, dropping by JPY 2,987/mt compared to the previous month. Though this decline at the current exchange rate would be $20/mt, taking into account currency fluctuations, the dollar-based prices have decreased by $14/mt from $355/mt to $341/mt over the past month. Moreover, this time the volume sold under the tender was just 5,000 mt compared to the previous 15,000 mt.
The buyer is thought to be South Korea, which also explains the lower price level. The FAS-based price translates to JPY 51,100/mt FOB or $348/mt FOB, $14/mt lower than last month. While adding the freight cost, the sales price to South Korea will be around JPY 54,100/mt CFR or $368/mt CFR.
The tender results, though expected at a lower level, indicated a decrease which exceeded the expectations of market participants a little, and they have already led to Tokyo Steel cutting its purchase prices by JPY 1,000/mt today.
SteelOrbis’ reference price for ex-Japan H2 scrap has settled at JPY 49,000-51,100/mt ($334-348/mt) FOB, where the lower end of the range has lost JPY 2,400/mt or $16/mt since last week.