Japan’s monthly ferrous scrap export tender, Kanto Tetsugen concluded on June 10 with average bids up by JPY3,880/mt ($31/mt) from the prior month. The tender sold 21,000mt ferrous scrap with the average of winning bids at JPY26,360/mt ($245/mt) fas Tokyo Bay compared to JPY22,480/mt fas Tokyo Bay in May. Around 25 companies participated in the tender which offered 134,200mt of scrap.
Traders were expecting this rise in scrap prices on the back of supply crunch. In April-May, Japanese ferrous scrap prices had dropped by JPY5,000-7,000/mt amid COVID-19 related shutdowns.
Bids in June rose for a second successive month. The first winning bid by Daisen Sangyo was for 6,000mt #2 HMS at JPY26,710/mt ($248/mt), up by JPY3,960/mt from JPY22,750/mt in the prior month. The second winning bid by Itochu Metals for 15,000mt was at JPY26,220/mt fas Tokyo bay.
The average winning bids of JPY26,360/mt fas or JPY27,360/mt ($253.8/mt) fob Tokyo Bay basis were also higher by around JPY1,000-2,000/mt than the previous booking at JPY25,500-26,000/mt fob Japan.
Kansai scrap export tender also rises
Japan’s Kansai scrap export tender which too concluded on Wednesday had average bids of JPY26,010/mt fas for 5,000mt of scrap.
In the Japanese domestic market, ferrous scrap generation remains still tight due to lowered manufacturing activities. Major traders, on the other hand, are holding on to their stocks in the hopes of prices rising in the near term.
Tokyo Steel’s bids for #2 HMS are at JPY24,500/mt del to both, Utsunomiya plant in the Kanto region and Tahara plant in the central region. Tokyo Steel has announced four price hikes in the last ten days. Prices have increased by a total of JPY2,000-3,000/mt since the beginning of June.
Kanto’s average winning bids are higher than current domestic price levels in Japan, indicating the bullishness in prices could continue in the coming days.