The price level recorded in this month’s Kanto scrap export tender has caused US dollar-based prices to move up more sharply due to the significant appreciation of the Japanese yen. Over the past month, the Japanese yen has gained strength significantly from JPY 151.0 to the dollar to 144.92. Japanese sources report that there is a gap between scrap demand and supply in the region, which is causing prices to move up. Following the Kanto tender, the leading Japanese EAF-based steel producer Tokyo Steel has also announced price increases for its domestic scrap procurement prices.
In the Kanto tender, the highest bid was at JPY 51,020/mt FAS, indicating an increase of JPY 782/mt as compared to the levels recorded early November. But due to the appreciation of the Japanese yen against the US dollar over the past month, the dollar-based prices have increased from $332/mt to $354/mt.
SteelOrbis has learned that 5,500 mt of scrap changed hands in the tender, while the buyer is unknown for now. A Japanese source reported that this level should be at around $360-365/mt FOB, but pointed out that the Japanese yen-US dollar exchange rate is very volatile, especially today, December 8.
Yesterday, December 7, Tokyo Bay FAS-based prices for H2 grade scrap were at JPY 49,000-50,000/mt ($340-347/mt). Tokyo Bay FAS prices for HS grade scrap were at JPY 52,500-54,000/mt ($364-374/mt), while prices for shindachi scrap were at JPY 51,000-52,000/mt ($354-360/mt) FAS. The rise observed in the Kanto tender and the price increase announced by Tokyo Steel today are expected to be reflected in the Tokyo Bay FAS prices.
$1 = JPY 144.22