Japan’s monthly scrap export tender, Kanto Tetsugen concluded on Tuesday, May 12 with average bids increasing by JPY1,820/mt ($17/mt) from the prior month. The tender sold 23,000mt of ferrous scrap, with winning bids at an average of JPY22,476/mt ($209/mt) fas Tokyo Bay compared to JPY20,656/mt ($192/mt) fas Tokyo Bay in April. The rise in May’s average bids has ended a downtrend of three successive months.
Market participants were expecting May prices to rise amid supply tightness. The rise, however, was more than their expectations, a supplier tells Davis Index.
The first winning bid was for 5,000mt #2 HMS by Sangyo Shinko at JPY22,750/mt ($212/mt), up by JPY1,950/mt from the first winning bid at JPY20,800/mt in April. The second winning bid for 3,000mt of #2 HMS, also by Sangyo Shinko was at JPY22,500/mt fas Tokyo bay. The third winning bid was for 15,000mt #2 HMS by Toyota company at JPY22,380/mt fas Tokyo bay.
The average of winning bids at JPY22,476/mt fas or JPY23,500/mt ($218.8/mt) fob Tokyo Bay were higher by around JPY1,500-2,000/mt than the prior contract concluded at JPY22,000/mt fob Japan.
Japanese suppliers are expecting prices to move up further as supply remains still tight in the Tokyo region. Availability though remained comparatively higher in Osaka, according to a trader.
In the domestic market, Tokyo Steel’s bids for #2 HMS stand at JPY18,500/mt del to both Utsunomiya plant in the Kanto region and Tahara plant in the central region. Kanto’s average winning bids are higher than present domestic price levels indicating a likelihood of a rebound in prices.