The monthly export tender of Japanese scrap dealer co-operative Kanto Tetsugen continued its upwards trend in May, propelled by a favourable currency exchange rate.
The May tender was concluded at ¥52,590/t fas for 20,000t of H2 scrap on 9 May, an increase of ¥1,503/t from April. This brought the fob price to an equivalent of ¥53,590/t or $344.60/t. Two cargoes were settled on 9 May, one of 15,000t and another of 5,000t, both at the same price.
Some market participants anticipated the first would go to Bangladesh, as in recent months, while some market discussions were suggesting both were destined for Vietnam. The Vietnamese domestic steel market has shown more signs of a recovery since mid-April.
The renewed increase in the export tender was mainly driven by the depreciation of the yen. Despite the significant increase in the tender result, the equivalent price in US dollars only rose by around $1/t compared with the previous month. The yen weakened to ¥155.70 to the dollar from ¥151.80 on 10 April.
The Argus H2 fob Japan assessment was ¥50,800/t on 8 May, while the April monthly average was ¥50,757/t fob Japan.
Tokyo Steel following the Kanto tender raised the collection price at its Utsunomiya plant by ¥1,000/t and maintained prices at other plants.
The increase in the tender result and domestic prices in the Kanto region will raise suppliers' target levels for export business. But overseas buyers may require more time to absorb the gain and await further rises in steel sales prices, a market participant said.
