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

Japan’s monthly scrap export tender- Kanto Tetsugen, concluded on Nov 11 with average winning bids of JPY30,605/mt ($291/mt) fas Tokyo bay, up JPY2,199/mt ($21/mt) from the prior month’s average of JPY28,406/mt fas Tokyo bay. The tender sold a total of 20,000mt of ferrous scrap for deliveries scheduled by December at the latest.

Average bids have reached an 18-month high, crossing the JPY30,000/mt mark for the first time this year. Earlier in May 2019, average bids were recorded at JPY30,597/mt fas.


Market participants had expected such a rise in the Kanto tender, fuelled by demand recovery in both, the domestic and export markets. Supply also remains scarce globally, including Japan. The auto sector has revived in East and Southeast Asia, thus driving demand for high-grade scrap.


On the fob Japan basis, the average of bids was at JPY31,500/mt ($300/mt) fob, higher by JPY2,000-2,500/mt than the current market levels. On the back of these results, traders state Japanese ferrous scrap export prices could surge in the coming days. Domestic scrap prices, which were largely flat in the Kanto region might increase.


For the Nov 11 tender, the first winning bid for 15,000mt #2 HMS was at JPY30,717/mt ($292/mt) fas Japan by a Vietnamese buyer. The second winning bid by a Taiwanese trading company was at JPY30,270/mt fas Japan for 5,000mt scrap. The first winning bid was higher by JPY2,288/mt ($21.7/mt) compared to that in the prior month. There were 18 bids for a total quantity at 147,500mt.


Kanto tender’s prices are likely to set precedents for Japan and Southeast Asian markets. East Asian market has resumed trades for imported scrap amid strong demand for billets in China. A possibility of resumption of ferrous scrap imports in China from early 2021 forced a few traders to restock ferrous scrap before they face a supply crunch.


In the domestic market, Tokyo steel has announced two price hikes in November. In the last revision, effective Nov 6, bids were raised by JPY500/mt ($5/mt) for deliveries to Tahara, Okayama, Kyushu, and Takamatsu plants. Purchase prices for #2 HMS was kept flat for over a month at JPY26,000/mt delivered Utsunomiya works in the Kanto region.  

In the second half of FY2020 (Oct 2020-Mar 2021), demand from the construction sector is likely to recover. Mills are thus ramping up production to cater to this expected rise in demand.




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