Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Japan’s month Kanto Tetsugen export tender concluded on Wednesday with the only winning bid for 15,000mt #2 HMS at JPY39,271/mt ($375/mt) fas Tokyo bay,  down JPY5,480/mt or $52/mt from last month’s average of JPY44,751/mt ($430/mt) fas Tokyo bay. The results defied market participants’ expectation of prices reaching JPY34,000-35,000/mt on a fas basis. Prices declined after hitting a 12-year high in January.  


The winning bid was still higher than the prior deals reported for Japanese scrap the overseas market on a fob basis. On the fob Japan basis, the average bids for #2 HMS jumped to around JPY40,000-40,500/mt fob. These levels are higher by around JPY3,500-4,000/mt than the prior offers in the export market.


Twenty-two bids were received from 15 companies for a total quantity of 175,900mt.


The successful delivery and clearance of Japanese HS grade scrap small bulk to the Chinese ports has kept sentiment positive. After the Chinese New Year holidays end in late February, more Chinese mills could be in the market for containers and bulk cargoes of ferrous scrap.  


Last week, South Korean mills bought few small bulks of  #2 HMS at JPY35,000/mt fob, indicating a rebound in Japanese scrap export prices by JPY5,000-6,000/mt.  


In the coming days, traders expect more export deals at increased prices. Tokyo Steel’s price revision is likely to clarify the extent of the rise. Supply also remains scarce amid increased demand for high-grade scrap in the auto sector in East and Southeast Asia.


In the domestic market, Tokyo Steel had cut scrap procurement prices eight times in January and once in February. The steelmaker has also announced plant maintenance at its Utsunomiya works.

After the last revision effective Feb 3, the steelmaker’s bids for #2 HMS are at JPY38,000/mt ($415/mt) del Tahara and at JPY29,000/mt del Utsunomiya works in Kanto.


Kanto Tender – Feb 10, 2021 

Japan has extended a state of emergency in Tokyo and surrounding areas as the number of COVID-19 cases continues to rise. The 2021  Olympic Games earlier scheduled in August look like a remote possibility that could impact consumption and economic activities.


Still, mills are ramping up production, and major mills like Nippon and JFE  steel are expecting better financial results in the current financial year. They have trimmed their loss forecast by 60pc than earlier estimates.


Prices of finished steel were flat to up for March-April deliveries, with expectations of few adjustments to stimulate demand. Market participants believe after the Chinese New Year holidays, Japanese steel and scrap prices could rise further on the strong demand outlook.





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