Ex-Japan scrap prices have surged by $78/mt in the December Kanto Tetsugen export tender. Most participants in the Asian market have been impressed by the results, even though the sharp increase was expected, as they were $50/mt above the previous tradable value for H2 scrap exports from Japan.
On December 10, the monthly Kanto Tetsugen scrap export tender in Japan was closed at the average price of JPY 38,710/mt FAS, up by JPY 8,105/mt ($78/mt) compared to last month's auction.
The total volume sold in two lots was 12,000 mt, less than the usual 20,000-25,000 mt: both lots were for 6,000 mt. One contract price was JPY 38,910/mt FAS, and the second deal was at JPY 38,510/mt FAS. The rumours in the market said that the target sales market is Vietnam, but this has not been confirmed by the time of publication and the price level should be very high for customers, Japanese traders confirmed.
The average price on FAS basis in the Kanto tender translates to JPY 39,710/mt ($380/mt) on FOB basis. As SteelOrbis reported earlier this week, the tradable price level for H2 scrap from Japan has been at JPY 34,000-34,800/mt ($327-335/mt) FOB. “The market is a mess. It is hard to settle the price now,” an exporter from Japan said.
After the tender result, the SteelOrbis reference price for H2 scrap from Japan has increased to JPY 36,500-37,500/mt ($349-359/mt) FOB, which is JPY 3,000/mt or $29/mt above last week’s level. The tender price has not been included in the range so far as market sources have said that the Asian import market should react first.
Before the recent price increase, one small deal for H2 scrap from Japan was reported to S. Korea at JPY 35,500/mt ($340/mt) FOB earlier this week, a level which is not available any more.
Some offers from Japan also for H2 have been at $385-390/mt CFR Vietnam, up from deals at $360-365/mt CFR last week.