Scrap price in Kanto export tender down $9/mt from Sept, but up from latest deals

Friday, 09 October 2020 15:33:36 (GMT+3)   |   Istanbul
       

Scrap prices in the fresh Kanto Tetsugen export tender have as expected decreased due to weaker demand in Asia and the recent decline in Turkey, but the pace of the decline has been smaller than market participants had expected. Compared with the previous deals signed in late September-early October, the prices for Japanese scrap have posted some slight increase.

On October 9, the monthly Kanto Tetsugen scrap export tender in Japan was closed with a JPY 964/mt ($9.1/mt) drop compared to last month's results, while in September it had posted a $20/mt rise. The average price at the recent auction was JPY 28,407/mt ($268/mt) FAS.

This average price on FAS basis translates to JPY 29,407/mt ($277.45/mt) on FOB basis, higher than the latest deal price range of JPY 27,000-28,000/mt ($255-264/mt) FOB, according to SteelOrbis.

The total volume sold in two lots was 20,000 mt with both of them traded to large traders, targeting Vietnam, according to market sources. If calculating the average tender price on CFR Vietnam basis, it is around $302/mt CFR for H2, traders confirmed, $5-7/mt above the previous transactions prices for the same grade in Vietnam at $295-297/mt CFR. “I doubt someone else [except Vietnam] will buy at this level,” a source said.

The sentiment in the Japanese scrap export market has been mixed after the Kanto tender as some sources believe that the downtrend in Turkey and weak demand in such countries like S. Korea and Taiwan for Japanese material should bring prices down in the near future. At the same time, the higher than expected results in the auction have been assessed as positive signals, supported also by higher prices for steel products in China on the first day after the holidays.


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