The first signs of a price improvement have emerged in the Japanese export scrap market as the Kanto Tetsugen auction has been closed at a higher than expected level.
On July 9, the monthly Kanto Tetsugen scrap export tender in Japan was closed with a JPY 2,786/mt ($26/mt) decline compared to June results, which was more or less expected, taking into account the ongoing spot price decline over the past month. However, the average price at the auction was JPY 23,574/mt ($220/mt) FAS, which is equivalent to JPY 24,574/mt ($229/mt) on FOB basis, higher than in the previous bookings in the export market and above the level expected by market sources. “It is a clear sign that we have hit the bottom. The next issue is to what extent the market will go up,” a major trader in the market told SteelOrbis.
The total volume sold in two lots was 22,000 mt: one of them was traded at JPY 24,600/mt FAS and the second at JPY 24,542/mt FAS.
As SteelOrbis reported earlier, the latest deals to South Korea for H2 scrap from Japan were concluded at JPY 22,500/mt ($210/mt) FOB. After the recent higher than expected Kanto tender, there have been no such offers in the market anymore and suppliers have started to voice offers at a minimum JPY 23,000-23,500/mt ($214-219/mt) FOB, SteelOrbis learned on Thursday. Many exporters have been taking their time, evaluating new market conditions.
Offers for H2 from Japan to Vietnam have increased to $255-260/mt CFR, while last week there were reports of deals at $245-252/mt CFR.