The winning bid in the monthly auction held Tuesday for Japanese H2 scrap for export from Tokyo Bay was Yen 32,160/mt ($314.70/mt) free alongside ship, the organizer of the tender said.
The bid was Yen 450/mt ($4.40/mt) lower than the winning bid in last month's auction, a smaller drop than expected, the official said.
"Traders are currently paying around Yen 30,500/mt FAS at Tokyo Bay area to collect H2 material to be exported," the official said. "Winning bids were much higher and surprised us."
The regular monthly auction organized by the Kanto Tetsugen grouping of scrap dealers based around Tokyo saw 25 bids lodged for 169,000 mt and four accepted for a total of 25,000 mt.
The other three accepted bids were at Yen 31,980/mt FAS, Yen 31,950/mt FAS and Yen 31,950/mt FAS.
The highest bid was from Nippon Steel & Sumikin Bussan Corp., or NSBC, the trading arm of Japan's largest integrated mill, for 10,000 mt. The second- and third-highest bids were from major scrap trader Marubeni Tetsugen for 5,000 mt each. The fourth was by JFE Shoji Trade, trading arm of JFE Steel, for 5,000 mt.
Scrap procurement officials from NSBC and JFE Shoji could not be reached for comment Tuesday.
An official from Marubeni Tetsugen said he believes the company already has back orders at higher prices for export, which will be filled with the parcels from Kanto Tetsugen. He declined to give details on the destinations or prices.
Tokyo Steel Manufacturing, Japan's major mini-mill, last cut its scrap buying prices by Yen 500/mt for a month, starting with May 3 arrivals at its Utsunomiya works in northern Kanto and Okayama and Takamatsu Steel Center in western Japan.
H2 material prices at Utsunomiya works have been trading at Yen 32,000/mt.
"We hear the deliveries to mini-mills have been smooth," a Tokyo-based distributor said. "They may still have room to cut their purchasing prices."
