FLASH: Kanto Tetsugen scrap export price finally peaks

After climbing steadily for months, the Kanto Tetsugen auction price for Japanese H2 grade scrap for export has finally peaked, with the winning bid in Wednesday morning's auction for H2 for export through Tokyo Bay before end-July decided at Yen 54,506/tonne FAS ($340/t), lower by Yen 96/t from the winning price in last month's tender.

The auction, held by the Kanto Tetsugen grouping of scrap dealers in the Tokyo, Yokohama and Saitama areas, attracted 14 bids from trading companies seeking a total of 120,400 tonnes – 50,000 tonnes less than last month. The top bid was for 20,000 tonnes, double the quantity sought last month for current month shipments.

The dealer grouping never identifies the trader submitting the winning bid, but market chatter suggests it was Toyota Motor's scrap trading arm, Toyota Tsusho. This is possible as the dealers said the scrap is destined for Bangladesh and in the past, Toyota Tsusho has often supplied cargoes to Bangladesh Steel Re-Rolling Mills, as Mysteel Global has reported.

The reduction in the winning price was not a surprise as prior to the auction, Japanese scrap sources had commented that foreign buyers didn't seem to be in any hurry to buy Japanese scrap because Asian prices were undergoing "adjustment".

Written by Russ McCulloch, russ.mcculloch@mysteel.com

Edited by Alyssa Ren, rentingting@mysteel.com