Japan: Monthly Scrap Export Tender Fetches Bids Higher by USD 6/MT

Japan’s monthly ferrous scrap export tender -'Kanto Tetsugen' has continued to fetch the high auction prices again in Sept'17. As per a recent report, in the tender concluded today (on 12th Sept) the winning bid price averaged at Japanese Yen 32,230/MT FAS (USD 294/MT) for the H2 grade ferrous scrap.

The bid fetched is higher by Japanese Yen 624/MT (USD 6) M-o-M as the bids had sold at Japanese Yen 31,606/MT in the last month tender(Aug'17). Monthly around 20,000 MT scrap get auctioned through this tender.

Remarkably, Sept’17 bid prices are highest since previous 3 years.The last highest price before this was recorded in Sep’14 at Japanese Yen 33,825/MT(USD 308).

It is to be noted that FoB prices for the same are higher by around USD 9-10 than FAS (free alongside ship) prices. It was expected by most of the traders and sellers that the bid prices for Kanto tender will rise in this month. Most of them were waiting for this tender to get a clear picture of future price trend in the scrap market.

In CY16, total 245,000 MT ferrous scrap was exported from Japan through this tender out of which Vietnam lifted 220,000 MT scrap, 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’01 to make the joint export of steel scrap to foreign countries. It consists of 80 companies of the metal recycling business in Tokyo, Saitama, Kanagawa, Chiba, Gumma, Tochigi, Ibaraki, and Yamanashi. It also exports steel scrap primly to East Asian countries like South Korea, China, Taiwan, Vietnam, and Indonesia.

Key features of Kanto Tetsugen monthly scrap tender:

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