Japan’s monthly Kanto Tetsugen scrap tender, Wednesday, concluded JPY345/mt ($3.15) higher than last month’s average of JPY48,830/mt fas. The only winning bid was from Nittetsu Busan for 7,500mt #2 HMS at JPY49,195/mt ($449.5) fas Tokyo Bay.
The low auction volume of 7,500mt against the usual levels of 20,000mt indicates limited interest at higher prices and supply tightness. Average prices in Japan neared the record highs of JPY50,000/mt fas levels last seen in August 2008 tender. Average bids had shot up to JPY50,650/mt in August 2008 and as high as JPY67,750/mt in July 2008.
On a fob basis, average winning bids in June’s tender are near JPY50,000/mt mark for #2 HMS. The results of the tender indicate a gap of over JPY4,000/mt in the current export price expectations against steelmaker Hyundai’s bids at JPY46,000/mt fob Japan as of June 3.
Steel mills in South Korea and Vietnam are expected to hike their bids for Japanese scrap on fob terms this week.
Following a rise in Kanto bids, Tokyo steel could revise prices upward which have remained stable since May 19.
Japanese finished steel prices remained elevated on the strong demand outlook despite slow economic recovery. There is still uncertainty about the conduct of the Olympic Games, which are scheduled to start on July 23, and Paralympics from August 24, without foreign spectators.