Japan: Kansai Scrap Export Tender Concludes After 5 Months Gap

Japan's Kansai Iron and Steel Federation is an association of scrap dealers around the Osaka region. Usually, it conducts the joint scrap export bidding for around 5,000-10,000 MT of H2 scrap in Japan. As per updates received, Kansai scrap tender conducted yesterday (15th June) in which the winning bid was awarded a total 5,000 MT of Japanese H2 at an average of JPY 28,050/MT (USD 258), FAS and shipments are scheduled for July month.

Notably, the tender has been concluded after a gap of 5 months as prior to this, the association had conducted the last tender in January month in which average bids were recorded at JPY 28,710/MT (USD 264), FAS. Thus, an average bid fell JPY 660/MT (USD 6) as against the Jan'19 auction.

It is to be noted that FoB prices for the same are higher by around USD 9-10/MT than FAS (free alongside ship) prices. Thus, the average bids stand equivalent to JPY 29,000/MT, FoB for H2. In line with this, South Korean leading scrap buyer Hyundai Steel has recently lowered bids to JPY 29,000/MT, FoB levels.

In 'Kanto Tetsugen'- monthly ferrous scrap export tender held on 11th Jun'19, a total of 20,300 MT H2 was auctioned at an average bid at JPY 28,967/MT (USD 267), FAS. Therefore, Kansai tender's average bids moved down further JPY 917/MT (USD 8) against average bids for Kanto tender in Jun'19.

As an impact of this, it is expected that Japanese scrap prices may remain weak for the short term. Also, Domestic H2 average scrap price index reported by the Japan Steel Association recorded 9th successive fall and stands at JPY 27,900/MT, lower by JPY 200/MT against the last week.

~ Inputs from SteelDaily