Japan’s monthly scrap export tender, Kanto Tetsugen concluded on March 11 with average bids down by JPY96/mt ($1/mt) from the prior month. The tender sold 30,000mt ferrous scrap with the average winning bids at JPY22,655/mt ($217/mt) fas Tokyo Bay, down from JPY22,751/mt ($244/mt) fas Tokyo Bay in February.
The first bidder was Itochu company who purchased 15,000mt #2HMS at JPY22,970/mt ($219/mt) fas Tokyo Bay, down by JPY40/mt from the winning bid of JPY23,010/mt last month. The second bidder was Toyota Tsusho, who purchased 15,000mt #2HMS at JPY22,340/mt fas Tokyo Bay. The gap between the first and second winning bid was JPY630/mt ($6/mt).
The average winning bids at JPY22,655/mt fas, which was equivalent to JPY23,655/mt ($216/mt) on fob Tokyo Bay basis, were higher than domestic scrap prices in the Kanto region. Tokyo Steel’s bids for #2 HMS are at JPY19,500/mt del Utsunomiya plant in the Kanto region, lower by JPY3,655/mt than the average winning bids.
Japanese traders, however, believe prices are unlikely to rise in the near term. A glut of scrap amid lowered domestic consumptions could pressure the prices. Japanese economy at present is weak and the demand from South Korea, a leading trade partner is also bearish.
Japanese currency yen appreciated against the USD. The USD to JPY exchange rate stood at US$1 to JPY104.7 on Wednesday, from JPY112 on Feb 20. This appreciation in Japanese currency has dented suppliers’ interest in the exports market this week.
In export markets, major South Korean steelmakers like Hyundai Steel and Dongkuk Steel booked Japanese scrap with #2HMS at JPY23,000/mt fob Japan and JPY23,500/mt last week.