Japan’s monthly scrap export tender ‘Kanto Tetsugen’ concluded on Thursday with average winning bids recorded at JPY23,574/mt ($220/mt) fas Tokyo bay. The tender sold a total of 22,000mt of ferrous scrap.
The average of bids dropped by JPY2,786/mt ($26/mt) from the prior month to JPY24,500/mt fob Japan. These are JPY2,000/mt higher than the current market levels. Based on the results of the tender, traders are hoping for the prices to bottom out and start their upward trend in the coming days.
The first winning bid by ‘Sangyo Shinko’ for 12,000mt scrap was at JPY23,600/mt fas. The second winning bid by ‘MM&Kenzai’ company was for 10,000mt at JPY23,542mt fas Japan. The tender on average auctions around 20,000mt of ferrous scrap. In July, however, the volume sold was high amid oversupply relative to limited demand.
Kanto tender prices are likely to set precedents for Japan and Southeast Asian markets.Though, many participants feel that higher Kanto’s average bids would be repulsive for the market.
In South Korea, Hyundai steel presented bids for busheling, HS, and shredded at JPY25,000/mt fob Japan or #2 HMS at JPY22,000/mt fob Japan last week. In Japan’s domestic market, Tokyo steel has been frequently announcing price cuts since mid-June.
For economic activities to recover in Japan, it could take a few months more over the earlier estimates. According to the Ministry of Economy, Trade, and Industry, the country’s crude steel output is forecast to fall by 27.9pc in the July-September quarter to an 11-year low. Leading steelmakers like JFE and Nippon steel have announced production cuts but switching off their blast furnaces while key downstream industries such as the auto and construction sectors as reeling under the impacts of COVID-19.