Japan: Bids in Kanto Scrap Export Tender Fall to 4-Month Low

Kanto Tetsugen’- Japan’s monthly ferrous scrap export tender for Feb’20 was concluded today (12th Feb’20) in the Kanto region. After successive price hikes for the last 3 months, since Nov’19, the winning bid price again fell sharply this month on the ongoing collapse in the Japanese domestic scrap market.  Bids in Japan scrap export tender have hit 4-month low as prior to this lowest was in Oct'19.

A total of 25,200 MT of Japanese H2 scrap was awarded at an average price of JPY 22,751 /MT (USD 207), FAS, as compared to JPY 26,667/MT (USD 243) in Jan'20, witnessing a significant drop of JPY 3916/MT (USD 36) in the winning bids on a monthly basis. Monthly around 25,000-30,000 MT of H2 scrap is auctioned through this tender. Notably, the FoB prices for the same are higher by around USD 9-10/MT than FAS prices

A total of around 25,200 MT of the material was bid this month as against the 26,100 MT was bid in the previous month, down by around 900 MT.  Evan after the sharp fall, this month’s bid is still slightly higher than the lowest level achieved in Oct’19 by around JPY 457/MT

Considering that the FoB levels of the bid price will be around JPY 23600-23700/MT, the winning bids for H2 export are almost at par with the price levels bid by major overseas buyers like South Korea’s Hyundai Steel which recently bid JPY 23,500/MT FoB for H2, the sharply falling Japanese domestic sentiments may indicate a further fall in overseas bids in the coming days.

On the other hand, Japan’s Tokyo steel has lowered its domestic scrap purchase price at all of its 5 works by around JPY 2000/MT in last one week alone, and the result of the Kanto tender will give further direction to the market.