While the Japan-based Kanto scrap export tender has indicated a $13/mt price decrease month on month, the decline was significantly lower than the previous $77/mt recorded in July. Also, the price levels observed today, August 10, are higher than the recent dock prices in Japan. SteelOrbis has learned that South Korean mills are also evaluating whether the scrap price has hit the bottom or not, though the successful buyer in the tender was not from South Korea. Also, as of tomorrow Japan will have a one week-long break for the Obon Holidays. A Vietnamese buyer commented, “Ahead of the holiday, Japanese scrap offers are very quiet, with almost no new offers.”
On August 10, the Kanto Tetsugen monthly export tender has been closed at the average price of JPY 42,061/mt ($312/mt) FAS, which is down by JPY 2,484/mt or $13/mt from July, taking into account exchange rate fluctuations. This price corresponds to JPY 43,061/mt ($319/mt) on FOB basis. Last week, Tokyo Bay FAS-based prices for H2 grade were at JPY 39,500/mt ($296/mt - with the exchange rate at 133.68) FOB. As a result, the Kanto tender closing higher than the previous Tokyo Bay prices is considered to be promising.
SteelOrbis has learned that 15,000 mt was sold at JPY 43,073/mt ($319/mt) FOB, while another 5,000 mt was sold at JPY 43,030/mt ($318/mt) FOB. A total of 20,000 mt is lower than the previous month’s total of 25,000 mt. According to market sources, the 15,000 mt in question were sold to Bangladesh. “We guess that Bangladesh decided to purchase as Turkey’s purchase price is going up. Other than Bangladesh, Asia is still quiet for now, but others would move after this tender result,” a Japanese source commented.
The winning price translates to $375/mt CFR Vietnam, according to sources. “It is higher than the price levels fixed in deals last week,” a source commented. Last week, a Vietnamese buyer successfully concluded a deal for Japanese H2 grade scrap at $350/mt CFR. Hence, the Kanto tender signals a recovery in Japanese export offers. Also, an ex-Hong Kong offer for HMS I/II 50:50 scrap by bulk to Vietnam has been given at $367/mt CFR to Hai Phong, but the buyer has not bid yet. According to a source, “Vietnamese buyers are not reacting quickly to the uptrend of scrap prices since the finished product market is still slow.”
As a result, the SteelOrbis reference price for ex-Japan H2 scrap has increased by JPY 3,500/mt or $22/mt on the upper end, due to the higher levels recorded in Kanto tender, to JPY 38,700-43,000/mt ($290-318/mt) FOB.