Japanese scrap dealer co-operative Kanto Tetsugen's monthly export tender fell for the first time in five months owing to low demand from the steel sector and a sluggish overseas market.
A total of 5,000t of H2 scrap was concluded in the March tender at ¥50,100/t fas, marking a decrease of ¥2,987/t from February. This brought the fob price to an equivalent of ¥51,100/t or $348.42/t.
Overseas buyers swiftly lowered their price expectations following the lunar new year holiday because of an insufficient recovery in steel demand. The tender result reflected current market levels, with the Argus H2 fob Japan assessment standing at ¥50,300/t on 11 March, while the February monthly average was at ¥52,120/t fob Japan.
The substantial month-on-month decline was also partly influenced by the strengthening of the Japanese yen, given that most export negotiations are in dollar terms. The Japanese yen rose to ¥146.90 against the US dollar on 11 March, up from ¥149.30 on the day of the February Kanto tender.
Before the tender announcement, buyers had aimed for around $370/t cfr Vietnam for H2 and $360/t cfr Taiwan for H1/H2 in a 50:50 ratio in the past week, but no sellers were willing to accept such levels. Following a lower tender result, most market participants expected Tokyo Steel to further cut its domestic scrap prices, potentially prompting some suppliers to consider lower prices in the seaborne market. The H2 price stood at ¥52,500/t delivered to the mill for the Tokyo Steel Utsunomiya plant.
