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

Japan’s monthly scrap export tender ‘Kanto Tetsugen’ concluded Friday, October 09, with an average winning bid recorded at JPY28,406/mt ($277/mt) fas Tokyo bay, down JPY964/mt ($9.1/mt) from an average at JPY29,370/mt fas Tokyo bay the prior month. The tender sold a total of 20,500mt of ferrous scrap for deliveries scheduled at the latest by November.


The average bids dropped after reaching a 16-month high in September. It was expected that prices would drop in October tender following low demand in both domestic and export markets in Japan. 


On the fob Japan basis, the average of bids recorded at JPY29,000-29,500/mt ($274-279/mt) fob. The average bids stood higher by JPY2,000-2,500/mt than the current market levels. Based on the results of the tender, traders are anticipating that Japanese ferrous scrap export prices will remain stable and not much of a drop is likely in the coming days.


In Friday’s tender, two winning bids were from Vietnamese trading companies. The first bid for 10,000mt #2 HMS at JPY28,429/mt ($269/mt) fas Japan, followed by the second at JPY28,384/mt fas Japan for 10,500mt. The first winning bid was lower by JPY941/mt ($8.9/mt) from the highest bid received the prior month. Mitsui Metalone Kenzai (MMK) and Nippon Steel Trading (NST) are said to be winners of Friday’s tender.


Kanto tender’s prices are likely to set precedents for Japan and Southeast Asian markets. East Asian market was slow due to long week holidays for Golden week in China, Thanksgiving holidays in South Korea, and Moon holidays in Taiwan. 


In the domestic market, Tokyo steel has held prices flat after announcing two price hikes in September on global uncertainty. Effective Sep 15, bids rose by JPY1,000/mt ($9/mt) for ferrous scrap delivered to Tahara plant and JPY500/mt delivered Kyushu plant. Purchase prices for #2 HMS is at JPY26,000/mt ($246/mt) delivered Utsunomiya works in the Kanto region and at JPY27,000/mt delivered Tahara plant in the central region. 



Japan’s steel output at record low

Japanese crude steel output is likely to drop to 82mn mt in 2020, down around 17.2pc from the prior year. The total would be the lowest since 1969, the lowest in the last 50 years. The Japanese economy continues to feel the effects of COVID-19 pandemic.


Although steel orders have shown improvement since August. As demand from the auto industry rebounded, a few steelmakers like JFE and Nippon Steel have reignited their blast furnaces at Fukuyama and Kimitsu, respectively. Though, industry participants are doubtful if it is too early to call it a recovery and say demand will remain unstable for the duration of the pandemic. 

In the second half of FY2020 (Oct 2020-Mar 2021), demand from the construction sector could recovery and in anticipation, Japanese mills are preparing to ramp-up production.







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