Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Japan’s monthly Kanto Tetsugen scrap tender, Friday, concluded with average bids at JPY47,888/mt ($435/mt) fas Tokyo port, down JPY1,307/mt ($11.8) than last month’s average of JPY49,195/mt fas. In the July 9 tender, the single winning bid was from Itochu company for 14,000mt of #2 HMS at JPY47,888/mt fas Tokyo Bay. The shipment will be delivered to Vietnam by August at the latest. 


Supply of scrap in Japan remains tight, with volume offered for auction for the second month. The ferrous scrap volume offered in the July auction was below 15,000mt. Buyers also resisted booking material at present price levels. Ferrous scrap prices in Japan have reached a 13-year high in June and are now softening. 


July 9 – Japan Kanto Scrap Tender

On a fob basis, average winning bids in July tender were at JPY48,888/mt fob for #2 HMS. A decline in both, fob and fas prices indicate that prices in Japan are losing steam. Following the tender, Tokyo Steel lowered bids by JPY500/mt at two of its works – Tahara and Kyushu. Bids for deliveries to the rest of the works have been kept flat. Hyundai Steel lowered bids to JPY48,000/mt fob Japan for #2 HMS as of July 9.


Steel mills in South Korea, Taiwan, and Vietnam were already resisting high offers. After the tender, buyers in the three countries could cut bids for Japanese scrap further.


Following global cues, Japanese finished steel prices remained elevated. Ahead of the Olympic Games starting July 23 and Paralympics starting August 24, a rise in imports of consumables for the games could cause supply disruption and congestion at the ports. A COVID-19 resurgence in Southeast Asian countries is already causing shipping woes.  


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