Prices for Japanese scrap in the Kanto Tetsugen monthly export tender have increased by a strong $61.5/mt in October to a level assessed by market participants as “high”, which is a signal for further rises expected in both the local and export markets in the near future.
On October 12, the Kanto Tetsugen scrap export tender was closed for two lots totalling 11,000 mt of H2 scrap at an average level of JPY 53,213/mt ($471/mt) FAS, up by JPY 6,953/mt ($61.5/mt) from the average auction price last month. One lot of 5,000 mt of scrap was sold at JPY 53,291/mt FAS, while another one (6,000 mt) was traded at JPY 53,120/mt FAS. The overall volume in the Kanto tender this month was lower than the total tonnage of 20,000 mt traded last month, due to the rapid increase in prices.
For now, it is still unclear what will be the sales destinations for the material from the Kanto tender, as most overseas buyers are not ready to accept the higher prices just now. The SteelOrbis reference price has been at JPY 52,500-53,500/mt ($465-473/mt) FOB since late last week, while the price in the Kanto tender corresponds to JPY 54,213/mt ($480/mt) FOB. This signals an expected further increase in the tradable prices for Japanese scrap in the near future. In addition, as supply is still lower than demand, prices in the local Japanese market will also improve again shortly.
According to market reports, major South Korean mill Hyundai Steel will hold its tender for ex-Japan scrap purchases tomorrow, on October 13