Japanese scrap export prices rise after today's monthly Kanto tender result

• Kanto tender bids up by JPY 404/t ($4) FAS m-o-m
  
  
• SteelMint’s assessment for bulk H2 rises by JPY 2,500/t FoB w-o-w
  
  
• Export offers for Vietnam rise, South Korean mills likely to raise bids
  
  

A total of just 20,000 t of Japanese H2 scrap was awarded at an average price of JPY 43,380/t ($397) FAS in Kanto Tetsugen monthly ferrous scrap export tender concluded today for Apr'21. The tender was concluded in slots of 5,000 t of scrap each, witnessing a bid price increasing by JPY 404/t ($4) m-o-m.

The bid price in Japanese scrap Kanto tender is successfully concluded at higher than expected levels, though there is room for an increase in prices further, SteelMint understands. Noticeably, the bid price during the same period in the preceding year was received at JPY 20,656/t FAS basis, which was recorded at lowest level during CY’20.

Monthly, around 15,000-20,000 t of H2 scrap is sold through Kanto tender auction and the FoB prices for the same are higher by around $9-10/t vis-a-vis FAS. The tender serves as a benchmark for the Japanese scrap export market.

Japanese scrap export offers have moved up further as demand from the overseas market is increasing before holidays. SteelMint's assessment for Japanese H2 scrap export stands at JPY 43,500/t ($397) FoB.

Other potential Japanese scrap buyers like Vietnam and Bangladesh are looking for other scrap source countries due to increased offers. Offers for bulk H2 grade scrap stand at $450-455/t CFR for Vietnam and $470/t CFR to Bangladesh levels. Decreasing freight rates have kept buyers relieved.

Japan’s leading steel mill �" Tokyo Steel did not announce any price revision for scrap purchase this week.

Japan’s ferrous scrap export volumes rebound by 29% in Feb'21: Japan’s ferrous scrap exports have registered a significant rebound to 0.62 mn t (up by 29% m-o-m) in Feb'21 as compared to 0.48 mn t in Jan'21. Higher Japanese scrap export demand and weaker performance of domestic steel market resulted in an increase in exports in Feb'21. Ferrous scrap export volumes to China doubled at 0.01 mn t in Feb'21 as compared to the previous month, since China has lifted restrictions on ferrous scrap imports from Jan'21.

Outlook: Japanese scrap export trades are likely to pick up before Japan’s Golden Week holiday (29th April- 5th May) as buyers will actively restock the inventory before the holidays.