Japan’s monthly Kanto Tetsugen scrap tender for August concluded Thursday with the average bid at JPY46,646/mt ($423.3/mt) fas Tokyo port, down JPY1,242/mt ($11.3) than last month’s average of JPY47,888/mt fas. The tender results could stabilize ferrous scrap prices in Japan. 

 

Kanto tender is usually held in the second week of the month, but because of the Obon holidays, the tender was postponed by around 10 days to Aug 19. 

 

The three winning bids were awarded a total 13,000mt of #2 HMS, which would be delivered by Sep 30. The highest winning bid from Hanwa company bagged 3,000mt at JPY47,183/mt, followed by 5,000mt at JPY46,290/mt from Newscon and the third was for 5,000mt at JPY46,050/mt from Houei company, according to sources. 

 

Thirteen companies participated in the tender for a total volume of 105,200mt ferrous scrap offered. 

  

HMS scrap supply is easing in Japan. JISRI indicated that HMS prices could remain under pressure while high grades could stay firm following limited availability and high demand from markets in east Asia.

 

Scrap volume auctioned in August, however, remains below 15,000mt as overseas buyers resisted booking material at current offers. Ferrous scrap prices in Japan have been declining after scaling a 13-year high in June 2021.

August 19 – Japan Kanto Scrap Tender

 

The average of winning bids for #2 HMS in the August tender can be equated to JPY47,646/mt ($434/mt) fob. A decline in both, fob and fas prices indicate that prices in Japan are losing steam.

 

Following the tender, Tokyo Steel could announce a price revision. It has already lowered bids twice for domestic scrap purchases in August.

  

Bid from South Korean Hyundai Steel at JPY45,500/mt fob Japan for #2 HMS early August. However, sellers might resist the bid as it lags by around JPY2,000/mt than current market levels.

 

After the tender, buyers in South Korea, Taiwan, and Vietnam could keep bids for Japanese scrap unchanged, however, domestic scrap prices could gain some support.

 

The COVID-19 situation in Japan remains a concern limiting steel demand in the country. Major steelmakers have recorded improved margins and maintain a positive outlook for the rest of the year, albeit due to the low base last year.

 

($1=JPY110.12)

 

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