The highest bid in Tuesday's monthly auction for Japanese H2 grade ferrous scrap for export from Tokyo Bay by end-May, fell by Yen 3,788/mt ($34/mt) from last month's winning bid to Yen 27,380/mt ($247/mt) free alongside ship, the organizer said.
The auction attracted 17 bids for a total of 118,200 mt of scrap with the average being Yen 26,426/mt FAS. A Kanto Tetsugen official said the total volume of bids were lower than those in previous months at 160,000 mt.
"Traders might be monitoring the movement and they were not [too] aggressive to place the parcel," the official said.
A Tokyo-based scrap trader said the winning bid is higher than the prices traders are paying to collect H2 material for export, so the winner must be expecting Japanese scrap export prices to be increased by end-May.
"But the average price was close to the prices traders are paying, we can say many traders think [the] trend of scrap prices is unclear at the moment," he said.
Japanese traders are currently paying Yen 26,500-27,000/mt FAS to collect H2 material to be exported from eastern Japan, down Yen 1,000/mt from a week ago.
Another Tokyo-based scrap trader said that export prices are lower than the prices domestic mini-mills are paying and less attractive for traders to export for now. "The latest bid by South Korea's Hyundai Steel on Monday was at Yen 27,000/mt FOB, but Japanese mini-mills are paying higher. Scrap traders and dealers prefer to deliver their scrap to the domestic mini-mills, not export," he said.
Japan's leading mini-mill Tokyo Steel Manufacturing had last changed scrap buying prices effective April 4, cutting by Yen 500/mt for all grades but only at Tahara works in central Japan and is currently paying Yen 31,000/mt truck delivered and seaborne delivered H2 material at the works. Tokyo Steel's Utsunomiya works in north of Tokyo is paying Yen 30,500/mt for H2 material truck delivered.
Japanese mini-mills have started preparing for Japan's Golden Week holidays in April 29-May 7, accumulating scrap stock for increased holiday production amid lower holiday power charges.
Platts assessed the H2 scrap export price at Yen 27,000-27,500/mt ($243-248/mt) FOB on April 5. The implied midpoint of Yen 27,250/mt FOB was Yen 500/mt lower week on week.
