The highest bid in Tuesday's monthly auction for Japanese H2 grade ferrous scrap for export from Tokyo Bay was Yen 18,310/mt ($178/mt) free alongside ship, down Yen 1,800/mt from last month's highest winning bid, the organizer said.
The auction held by the Kanto Tetsugen group of ferrous scrap dealers around Tokyo received 17 bids for a total 143,000 mt of scrap for export by September 15, with the bid average at Yen 17,363/mt FAS.
The winning bid was for 15,000 mt placed by JFE Shoji Trade, the trading arm of JFE Group.
The second-highest bid at Yen 18,051/mt for 15,000 mt was not taken this month because the group usually places 20,000-25,000 mt and 30,000 mt in total was too much to place in one auction, a Kanto Tetsugen official said.
The winning bid was higher than expected because traders are currently paying around Yen 17,000-17,300/mt FAS in the Tokyo Bay area to collect H2 grade material to be exported, the official added.
A Tokyo-based scrap trader said that JFE Shoji Trade may be eyeing exporting the auction parcel to Vietnam or Bangladesh.
"Scrap demand in Vietnam is expected to rise from late September after the rainy season," he said, adding customers in Bangladesh had also booked large volumes in the past.
Another scrap trader in Tokyo said he did not think the tender result would influence the market because both domestic and export demand for Japanese scrap appeared to be sluggish amid a seasonal summer lull. Scrap procurement officials from JFE Shoji Trade were unavailable for comment.
The most recent bid by South Korea's largest mill, Hyundai Steel, for Japanese H2 material was on July 8 at Yen 18,000/mt FOB, down Yen 500/mt from its previous bid on July 1.
Japan's leading mini-mill Tokyo Steel Manufacturing cut its scrap buying prices by Yen 500-1,000/mt for all grades at all works and a steel center effective July 9 arrivals.
The company is paying Yen 18,000/mt truck delivered to Utsunomiya works, north of Tokyo, for H2 material.
S&P Global Platts last assessed its weekly H2 scrap price at Yen 18,000/mt FOB Tokyo Bay on July 5.
