Japan: Monthly Scrap Export Tender Fetches Bids High by USD 15/MT

Japan's monthly ferrous scrap export tender - Kanto Tetsugen for Jan'18 has recorded highest since Feb'2011. On monthly premises, the winning bid fetched USD 15/MT higher in Jan'18 as against bids in Dec'17.

As per recent updates, 'Kanto Tetsugen'- monthly ferrous scrap export tender concluded today (on 12th Jan) in Kanto region. In the auction, 16,000 MT of Japanese H2 scrap was awarded to Econecol Company, Japan through two winning bids placed at JPY 37,800/MT (USD 340), FAS for 6,000 MT and at JPY 37,130 MT, FAS for 10,000 MT scrap respectively.

Earlier to this, highest prices were fetched at JPY 37,986/MT in Feb'11. Thus, the winning bid recorded has witnessed last 83 months' high price in Jan'18.

The bids fetched in Jan'18 are hiked by JPY 1,674/MT (USD 15) M-o-M as against the winning bid which was at JPY 36,126 (USD 325) in last month's tender concluded on 12th Dec'17.

It is to be noted that FoB prices for the same are higher by around USD 9-10 than FAS (free alongside ship) prices. It was expected by most of the traders and sellers that the bid prices for Kanto would rise owing to strong global prices and demand for scrap.

In CY16, Total 245,000 MT ferrous scrap was exported from Japan through this tender out of which Vietnam lifted 220,000 MT occupying 89% share followed by Taiwan (15,000 MT) and Korea (10,000 MT) respectively.

What is the Kanto Tetsugen export tender?

Kanto Tetsugen Cooperative Association was established in Nov'2001 to make the joint export of steel scrap to foreign countries along with the domestic trade. It consists of 80 companies of a metal recycling business in Tokyo, Saitama, Kanagawa, Chiba, Gumma, Tochigi, Ibaraki, and Yamanashi. It exports steel scrap majorly to East Asian countries like South Korea, China, Taiwan, Vietnam, and Indonesia.Kanto Tetsugen Tender set the benchmark in Japanese scrap market in terms of prices and trends.

Key features of Kanto Tetsugen monthly scrap tender -

1. The grade of steel scrap is constituted by mainly H2 and H1 as well. H2 is steel scrap based on Japanese industrial standards."500mm in width or less, 1,200mm in length or less, thickness 3mm - 6mm, weight 1,000 kg or less".
2. Quality inspections are done twice, once by members and the second by the surveyor at the port.
3. In addition, radioactive checking is performed before loading the scrap on vessels.