Japan: Kanto Scrap Export Tender for Jul'19 Fetches Bid Lower by USD 8
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The monthly scrap tender has witnessed fourth successive fall in average bids fetched recording a total drop of JPY 5,950/MT (USD 55) since March'19.
As per recent updates received from sources, 'Kanto Tetsugen'- Japan's monthly ferrous scrap export tender for Jul'19 has concluded today (10th July) in the Kanto region. Total 20,000 MT of H2 scrap was awarded at an average of JPY 28,060/MT (USD 258), FAS. Notably, this is the fourth successive monthly fall recorded in average bids, dropping a total by around JPY 5,950/MT (USD 55) from the peak achieved at JPY 34,010/MT in Mar'19.
On monthly premises, average bid in Jul'19 tender has moved down by JPY 907/MT (USD 8) against an average bid of JPY 28,967/MT (USD 267), FAS in Jun'19. Monthly around 20,000 MT of H2 is auctioned through this tender. Also, it is to be noted that FoB prices for the same are higher by around USD 9-10/MT than FAS prices.
What can be inferred from Kanto's result in Jul'19? It was being expected that the average bid in Jul'19 would soften further following a continued lowering of domestic scrap prices in Japan which are currently at more than 2 years low levels. However, price fall in July month was not as steep as seen in the earlier months.
Total volume auctioned in July month remained average (20,000 MT) as supply is not being considered as tight. While scrap importers in South Korea, Vietnam and other SE Asian regions have turned interested for Japanese scrap to take advantage of price competitiveness against global scrap offers.
Japan's leading EAF steelmaker Tokyo steel lowered scrap purchase price seven times in June month. Latest H2 price delivered at Utsunomiya plant in Kanto region has remained 2 years low at JPY 26,000/MT (USD 239). Poor support has been observed from the country's real estate sector while most of the construction activities for Olympics 2020 have reached the completion state, pulling finish steel demand down drastically.
South Korea's largest importer Hyundai Steel lowered bidding for Japanese scrap twice in June month amid availability of inventories and domestic scrap supply at competitive prices. Hyundai's last H2 bids stand at JPY 27,000/MT, FoB.
After witnessing slight appreciation to 107 levels in the mid of June, Japanese Yen has devalued again to 108.9 levels against USD, however, remained almost same against 108.6 levels noted a month back on 10th Jun'19.
