Japan: Kansai Scrap Export Tender Fetches Bid Down By USD 17

Japan's Kansai Iron and Steel Federation, an association of scrap dealers around the Osaka region concluded its 2nd tender for Sep'19, yesterday, (17th Sept'19) in which the winning bid was awarded a total 5,000 MT of Japanese H2 at an average of JPY 23,270/MT (USD 215), FAS. The current bid is JPY 1840/MT (USD 17) lower than the previous tender result on 4th Sep'19 earlier this month, while it is lower by JPY 4850/MT (USD 44) as compared to the winning bid of July'19.

Earlier this month, the federation had decided to export 10,000 MT in Sep'19 via 2 tenders instead of 5,000 MT in a month normally, due to oversupply of scrap in the domestic market. In the previous tender concluded in the 1st week of Sep'19, the winning bid had observed a sharp fall by JPY 3010/MT M-o-M, standing at JPY 25,110/MT (USD 231) FAS, while a further drop of JPY 1840/MT has been observed in the 2nd tender's result.

Notably, this is the 1st time since May 2017 that the winning bid has dropped below 24,000/MT level, as the price in May'17 was recorded JPY 23,707/MT.

Japanese domestic scrap prices have been falling continuously since last 6 months due to poor support from finished steel sales as well limited offers for export to overseas buyers, in addition to which the current global downturn in the scrap market has made the situation worse.

Last week, leading steelmaker Tokyo Steel also lowered its scrap purchase price 3 times across its 5 plants, while it is expected that purchase bids from major overseas buyers of Japanese scrap like Hyundai Steel will also come down sharply in the coming days.