The Kanto Tetsugen Cooperative Association, a group of Tokyo regional scrap distributors, has withdrawn its allocation of H2 grade scrap for export by end November after deeming all bids received in its latest monthly tender too low, an association official said Thursday.
It was the first time since June 2004 that the association has opted not to sell any parcels in its monthly tender for H2 grade material, the official said. The association usually offers around 25,000 mt.
Its minimum target price for Thursday's tender was Yen 35,000/mt ($313/mt) FAS, but the highest bid received was Yen 34,900/mt FAS for 10,000 mt, the official said.
A Tokyo-based scrap trader said traders were currently paying around Yen 36,000/mt FAS to collect H2 material in the Tokyo Bay area for export or shipping to western Japan.
"The price gap between the bids and the current collecting prices may mean there is market uncertainty about the direction of Japanese scrap prices, he said. "The association might have expected bids would be closer to the current collecting price," he added.
Another scrap trader in Tokyo said Kanto Tetsugen's minimum target of Yen 35,000/mt FAS equated to Yen 36,000/mt FOB, and the traders who submitted bids do not expect Japanese scrap prices to be above Yen 36,000/mt FOB for November shipping.
Japanese traders are currently targeting around Yen 36,500-37,000/mt FOB for H2 grade for export, reflecting the high prices they were receiving for H2 scrap from domestic buyers.
S&P Global Platts last assessed Japan's H2 ferrous scrap export price at Yen 35,500-36,000/mt FOB Tokyo Bay Wednesday, unchanged from the week before.
