Japan: Kansai scrap export tender fetches highest bids in 11 month; up by $39

After witnessing no tenders in last 2 months, Japan’s Kansai Iron and Steel Federation, an association of scrap dealers around the Osaka region, has concluded its tender of scrap export, for the month of Jun’20, yesterday (10th Jun’20), witnessing a sharp hike in the winning bids for the first time since Jan’20. The result came after a strong surge in Kanto tender’s winning bids was observed yesterday.

This month’s winning bid was awarded a total of 5,000 MT of Japanese H2 at an average price of JPY 26,010/MT ($205), FAS, in comparison to JPY 21,825/MT during the last tender in Mar’20, thus witnessing an increase of JPY 4,185/MT ($39). This month’s Kansai bids are highest in the last 11 months, as prior to this, bids higher than this were recorded in July’19.

Yesterday's Kanto tender’s winning bids were recorded at JPY 26,360/MT FAS,  for H2 scrap, almost at the same level as the Kansai result. Meanwhile, the export offers from Japanese suppliers have shown a significant growth over the last one and a half months, and currently stand at JPY 27,000-27,500/MT FoB Japan, for H2 scrap, up from JPY 19,000/MT in the later half of April. Korean Steelmakers have now raised their bids for Japanese scrap to JPY 26,500/MT FoB Japan levels, for H2.

It has been observed that, on one hand, scrap generation being low since last few months has limited the availability of scrap, while on the other hand, renewed construction activities in East Asia and SE Asia have increased steel and consequently scrap demand since the last month, thus driving the scrap export prices up to around 10-11 month high levels.

At the same time, local scrap shortage in Japan has pushed domestic scrap prices to almost 9 month high levels now, with Tokyo Steel raising its scrap purchase bids to their Utsunomiya plant in Kanto region to JPY 25,500/MT, highest since Sep’19.

inputs from SteelDaily