Japan Ferrous Scrap Export Price Drops by 590 yen/t

Japanese ferrous scrap export price started the year with decrease under the easing supply. Successful tender bid decreased by 590 yen or 3% to FAS 21,335 yen per tonne for H2 for February shipment at the export tender held by Kanto Tetsugen on Tuesday from a month ago. The tender knocked down 22,000 tonnes. The price decreased with slower appetite from steel makers in China and Asia under easing supply. The export price n 2006 could be lower than the averaged 22,270 yen at the tender by Kanto Tetsugen in 2005. Japanese scrap export price reached year-high of FAS 25,033 yen per tonne in April 2005 after it started the year at 20,520 yen in January. However, the price plunged to 18,500 yen in June due to lower demand in China where steel output decreased. The price has kept decreasing after the price rebounded to 24,300 yen in late September with higher demand. The export price in 2006 is expected to decrease from previous year for 2 consecutive years due to lower steel price in China. The price keeps decrease from the beginning of the year though the price increased twice in spring and autumn of 2005. The price could keep low level at least for the first year of 2006 even if Chinese government succeeds in structural adjustment for the steel industry. Scrap inventory is said to be enough in Asian countries. A trading firm won 11,000 tonnes of order at FAS 21,350 yen for H2 and another firm knocked down 11,000 tonnes at 21,320 yen at the tender by Kanto Tetsugen on Tuesday. They will ship the scrap by March 15. Ten firms submitted 16 bids for the tender while 5 firms rejected to bid. The total bids were 103,000 tonnes, which exceeded 100,000 tonnes for the first time since tender for September shipment. The lowest bid was 20,500 yen.