Japan: Higher Kanto bids drive up domestic scrap prices

• Kanto monthly scrap export tender bids up by around $50/t m-o-m.
  
  
• Tokyo Steel lifts scrap purchase prices by up to JPY 5,000/t in last 2 days.
  
  

Japan's monthly Kanto Tetsugen ferrous scrap export tender for May'21 was concluded on 11 May'21. A total of around 15,150 tonnes (t) of Japanese H2 scrap has been awarded at an average price of JPY 48,833/t ($449) FAS, an increase of JPY 5,453/t ($50) m-o-m, SteelMint learned from trade channels.

The material was booked through three winning bids in lots of 5,000 t (at JPY 49,279/t), 5,000 t (at JPY 49,279/t) and 5,150 t (at JPY 48,015/t) FAS. According to market sources, the highest bid is likely to have concluded for Vietnam.

Japanese scrap offers are expected to rise further in the near-term as bids fetched in today's tender are significantly higher than the prevailing market price, SteelMint understands.

"Since the Kanto tender has been concluded today, fresh offers for Vietnam, Bangladesh, and Chinese markets are likely to be announced tomorrow. Bids have jumped up significantly compared to the existing levels," said a Japanese scrap trader.

• Few trades were reported for Japanese H2 at $480/t CFR Vietnam following fresh offers which have risen to $485/t CFR Vietnam. Offers are expected to rise further.
  
  
• Bids for Japanese HRS grade scrap in China have increased to $545/t, CFR.
  
  

Tokyo Steel raises bids for domestic scrap purchase: Japan's leading EAF mill, Tokyo Steel, has announced two hikes for scrap purchase so far for May'21 by up to JPY 5,000/t. After today's announcement, the company will pay JPY 49,000/t ($450) and JPY 46,000/t ($422) respectively for H2 scrap delivered at Tahara and Utsunomiya plants, effective tomorrow (12th May).

Tokyo Steel's scrap purchase prices
Prices in JPY
Source: Tokyo Steel report

Increased Japanese scrap imports from Vietnam, China: Japan, one of the largest ferrous scrap exporters, observed an increase of 7% in scrap exports in FY'21 (Apr'20-Mar'21) to 8.57 mn t against 8.03 mn t in FY'20. Exports to Vietnam increased to 3.24 mn t in FY'21 compared to 2.6 mn t in the previous fiscal. Vietnam's scrap consumption remained high on firmer steel demand in the domestic and export markets. After China opened up to ferrous scrap imports this year, enquiries from Chinese buyers picked up and the country imported 0.09 mn t from Japan against 0.03 mn t in FY'20.