Posted on 10 Aug 2023
The organizer of the August 9 tender for H2 grade Japanese scrap for export next month, the Tokyo-headquartered Kanto Tetsugen, expressed relief that the winning bid was slightly higher than that in last month's auction - an on-month decrease had been a real possibility - but was disappointed the top price fell short of its target.
The winning price was Yen 49,799/tonne ($348/t) FAS, a tiny Yen 59 higher than the top bid in the July auction for export this month.
However, the tonnage awarded by the Tokyo-based scrap dealers was three times larger than last month's at 15,000 tonnes, compared with July's 5,000 tonnes. Perhaps not surprisingly given the size of the cargo, the scrap is bound for a distant market, namely Bangladesh, the Kanto Tetsugen quotes auction winner Toyota Tsusho Material as saying. The organizer gave no details about bid tabled by the unsuccessful runner-up.
"Toyota Tsusho's price was much higher than the latest bids by other overseas buyers, but maybe (the trader) placed a priority on securing enough volume," a Tokyo-based scrap market source suggested. "But it's mostly the same at the Tokyo Bay price," Mysteel Global was told. Currently, Japanese traders are paying scrap dealers Yen 49,500/t -Yen 50,500/t FAS at Tokyo Bay ports like Odaiba for H2 for export and for delivery to mills in western Japan, about the same as a month ago.
Significantly, Wednesday's tender attracted a total of 18 bids from 15 trading firms, with the total bid quantity being 105,250 tonnes, higher by 16,750 tonnes from the July total and marking the first time in seven months that the total quantity had topped 100,000 tonnes, the Kanto Tetsugen noted. It refrained again from revealing the average bid price but said that some traders had bid higher than Yen 49,000/t FAS.
Nevertheless, the grouping's chairman, Koji Minami, seemed a little disappointed at the result. "The winning price has not reached the Yen 50,000/t level, despite having the 'brand value' of the Kanto Tetsugen," local media quoted him as saying. "It seems as if the situation of 'a high domestic market price and a low overseas market price' will persist for a while."
Minami noted that the winning price was lower than the price that domestic scarp-market leader, Tokyo Steel Manufacturing, is currently paying for H2 delivered to its Utsunomiya works in the northern Kanto region of Yen 50,000/t, unchanged since July 12. Tokyo Steel did not change its scrap buying prices following Wednesday's auction result.
Source:Mysteel Global
