Japan: Kanto export tender extends 10th consecutive rise; H2 scrap sentiment stays firm amid tight supply

• Vietnam remain the active buyer for second consecutive month
  
  
• Tokyo Steel raises scrap purchase prices by $6/t following strong Kanto tender results
  
  

Japan's Kanto Tetsugen export tender extended its bullish momentum in May 2026, recording the tenth consecutive monthly increase amid firm domestic scrap sentiment and limited export availability. The latest tender concluded with 10,000 t of H2 scrap booked at JPY 54,602/t ($346/t) FAS, up by JPY 273/t ($2/t) m-o-m. The awarded level translates to around JPY 55,500/t ($352/t) FOB Japan.

The continued uptrend did not surprise the seaborne market, as Japanese domestic scrap prices remained firm, and export availability continued to stay limited. Market participants noted that most April-contracted cargoes are currently scheduled for vessel loading.

Meanwhile, the Japanese yen has strengthened modestly against the US dollar over the past month, appreciating from around JPY 159.3/$ on 12 April to nearly JPY 157.6/$ currently. The firmer currency has also contributed to higher export offer levels from Japanese suppliers by lifting dollar-denominated replacement costs.

Market comments

A regional scrap trader commented: "Japanese export prices continue to remain well supported by firm domestic market conditions and limited spot scrap availability. Exporters are under little pressure to aggressively lower offers, particularly as local mill buying sentiment remains strong."

Most market participants indicated that the latest Kanto cargo is likely to move toward Vietnam, where buying sentiment has remained comparatively stable due to better finished steel demand and active construction activity. In contrast, Bangladeshi buying interest remained weak, with no major trades heard during the week. Buyers continued to stay away from fresh bookings amid weak finished steel demand, liquidity pressure, and persistent financial constraints.

A Bangladesh-based importer said: "High freight costs, payment delays, and LC-related complications continue to affect import activity. Buyers are cautious and only booking material when absolutely necessary."

Market participants added that several exporters have increasingly shifted focus toward Southeast Asian destinations such as Indonesia, Taiwan, and Vietnam, where deal viability and payment visibility remain relatively better compared with Bangladesh.

"Vietnamese buyers may still be workable around $395/t CFR for H2 scrap, but current Japanese export offers are largely heard above $400/t CFR, making fresh deals difficult at the moment," a regional market participant said.

Domestic market support and price alignment

In the domestic market, H2 scrap prices were heard at around JPY 53,000-53,500/t ($335-339/t), while dockside collection prices stood at JPY 52,000-52,500/t ($329-332/t) FAS.

Tokyo Steel raised scrap purchase prices by JPY 1,000/t ($6/t) across all plants effective 12 May 2026, taking H2 purchase levels to around JPY 54,000/t ($343/t), while price announcements for the Takamatsu plant remained suspended. The latest upward revision reflects firm domestic scrap fundamentals in Japan, supported by active mill buying, limited scrap generation, and steady export demand following the recent Kanto tender strength.

Outlook

Japanese export scrap prices are expected to remain firm in the near term, supported by stronger domestic mill buying and limited scrap availability. However, higher offer levels may continue to face resistance from overseas buyers, particularly in Southeast Asia, where weak steel demand, freight pressure, and liquidity constraints are affecting import appetite. Market participants are expected to closely monitor upcoming export negotiations and domestic mill price movements for clearer direction ahead of the next Kanto tender, tentatively scheduled for the second week of June.