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

Japan’s monthly scrap export Kanto Tetsugen tender concluded on Jan 10 with average bids up by JPY873/mt ($8/mt) over the prior month. The tender sold a total of 26,100mt of scrap, with the average winning bids at JPY26,677/mt ($244/mt) fas Tokyo Bay compared to JPY25,804/mt in December.


The first winning bid for 5,100mt ferrous scrap was at JPY26,700/mt, up from JPY600/mt the prior month. This was followed by the second and third winning bids for 6,000mt and 15,000mt each, at JPY26,680/mt fas and JPY26,650/mt fas Tokyo Bay, respectively.


Market participants were surprised by the hike in tender prices as they anticipated a dip in prices. The equivalent fob prices are usually JPY1,000/mt higher than fas levels. The market price for H2 scrap was at JPY25,000-2,5500/mt fas.


Volumes of ferrous scrap sold in Kanto tender have increased successively for the past three months from the usual average of 20,000mt. Higher volumes of export are driven by lower domestic consumption of scrap post the completion of Olympic 2020 construction activities.


South Korean steel mills have booked Japanese H2 scrap in bulk cargoes at JPY26,000/mt fob Japan this week as suppliers were forced to lower prices. Mills have delayed buying as they believe scrap prices have peaked.


Hyundai Steel booked bulk volume H2 at JPY26,000/mt fob Japan. Hyundai expects a downward revision of scrap prices. The increasing standoff between Japanese suppliers and South Korean mills might result in diversion of Japanese scrap to Vietnam, Taiwan and Bangladesh market.


Tokyo Steel held its prices unchanged at JPY25,000/mt ($228/mt) for H2 delivered Tahara, Kyushu and Utsunomiya plants from its Dec 12 price revision. The company is reluctant to raise its bids despite the uptick in Kanto tender as domestic demand is low ahead of Chinese New Year holidays, said a trader.

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