Japan: Monthly Scrap Export Tender Fetches Bids Higher by USD 26/MT

Japan’s monthly ferrous scrap export tender - Kanto Tetsugen has recorded average bids up by USD 26/MT for Mar’18 amid high global scrap prices.

As per recent updates received from sources, ‘Kanto Tetsugen'- monthly ferrous scrap export tender concluded today (on 09th March) in Kanto region in Japan. In the auction, 20,000 MT of Japanese H2 scrap was awarded to Toyoto Tsusho Company, Japan through two winning bids placed at JPY 37,570/MT (USD 352), FAS for 10,000 MT and at JPY 37,470 MT (USD 351), FAS for 10,000 MT scrap respectively.

In Feb’18 tender, H1 bid was recorded at JPY 34,800/MT (USD 326 ).

The average bids for Mar’18 recorded at JPY 37,520/MT (USD 352), FAS. The average bids fetched in Mar’18 have increased significantly by JPY 2,770/MT (USD 26) on M-o-M basis as against the average bids at JPY 34,750/MT (USD 326) in Feb’18.

Earlier to this, highest bids fetched was at JPY 37,800/MT in Jan’18. Moreover, average bids recorded in Mar'18 climbed highest so far in CY18.

It is to be noted that FoB prices for the same are higher by around USD 9-10/MT than FAS (free alongside ship) prices. It was expected by most of the traders and sellers that the bid prices for Kanto would rise sharply owing to strong global scrap prices and demand for scrap.

With the high prices fetched in Kanto Tetsugen, Japanese scrap prices are expected to increase further. Highest bid recorded in Kanto Tetsugen for Mar’18 is higher by Japan’s H2 scrap prices at around JPY 36,500/MT (USD 342) at Kanto region. Tokyo steel mill fetches H2 at JPY 37,500/MT and JPY 35,000/MT at Tahara and Utsunomiya works respectively. While latest bid placed by South Korean steel mills for Japanese scrap is at JPY 37,000/MT, Fob Japan.

In CY16, Total 245,000 MT ferrous scrap was exported from Japan through this tender out of which Vietnam lifted 220,000 MT occupying 89% share followed by Taiwan (15,000 MT) and Korea (10,000 MT) respectively.

What is the Kanto Tetsugen export tender?
Kanto Tetsugen Cooperative Association was established in Nov’2001 to make the joint export of steel scrap to foreign countries along with the domestic trade. It consists of 80 companies of a metal recycling business in Tokyo, Saitama, Kanagawa, Chiba, Gumma, Tochigi, Ibaraki, and Yamanashi. It exports steel scrap majorly to East Asian countries like South Korea, China, Taiwan, Vietnam, and Indonesia.Kanto Tetsugen Tender set the benchmark in Japanese scrap market in terms of prices and trends.

Key features of Kanto Tetsugen monthly scrap tender -
1. The grade of steel scrap is constituted by mainly H2 and H1 as well. H2 is steel scrap based on Japanese industrial standards."500mm in width or less, 1,200mm in length or less, thickness 3mm - 6mm, weight 1,000 kg or less".
2. Quality inspections are done twice, once by members and the second by the surveyor at the port.
3. In addition, radioactive checking is performed before loading the scrap on vessels.