Japan's ferrous scrap export market for new deals has moved up to a level of JPY 30,000 per tonne FOB for No2 HMS since the export tender held November 10 by the Tokyo based Kanto Tetsugen cooperative association of ferrous scrap dealers.
With the export tender, Kanto Tetsugen professes to have firmed up sales of No2 HMS for a total quantity of 21,000 tonnes at an average JPY 29,368 per tonne FAS Tokyo Bay. Besides, the nation's largest electric steelmaker Tokyo Steel Mfg Co increased what the company pays for locally available ferrous scrap by JPY 1,000 to JPY 1,500 per tonne at its five works, effective with November 12 purchases. As a result, it is considered certain that offer prices will advance further to JPY 32,000 per tonne FOB for No2 HMS in new export deals of Japanese ferrous scrap.
A November 10 value of the yen depreciated by nearly 70 sen from the day before to a level of 81 yen to the US dollar. The depreciation served as the tailwind behind high winning bids in Kanto Tetsugen's Nov 10 export tender, market sources believe. As a result, it follows that the No2 HMS cargoes sold at high prices in the export tender will be allocated to export destinations on the basis of price terms denominated in US dollars.
At present, there are negotiated deals at high prices in Japanese ferrous scrap exports to Southeast Asia, according to market sources. Also, Japan's ferrous scrap suppliers have inquiries from several nations there such as Malaysia, Indonesia and Vietnam. As a result, they see the prospects of attractive export deals, depending on exchange rates.
For Malaysia, ferrous scrap cargoes from the USA sold at USD 410 per tonne C&F for No1 HMS by the end of October. Of late, No2 HMS from Japan too is said to have sold at a price level of USD 410 per tonne C&F. Information circulated earlier that a Japanese export deal of shredded material had been sold to Malaysia.
According to Japanese trading companies, freight rates are estimated at a level of USD 42 to USD 43 per tonne for ferrous scrap shipments from Japan to Southeast Asia, higher freight rates by nearly USD 10 than for shipments to Taiwan. Still, a Nov 11 value of the yen further depreciated to a level of 82 yen to the US dollar. Given an exchange rate of USD 1.00 to JPY 82, it would be possible to get a price of JPY 30,000 per tonne FOB or more for No2 HMS if a negotiable price goes up to USD 366 per tonne FOB for Southeast Asia. In fact, prices topped USD 366 per tonne FOB as of Nov 11 in part of new export deals of No2 HMS for Southeast Asia.
As far as Taiwan is concerned, though, local steelmakers' price ideas are on decline for new imports of ferrous scrap as they have completed purchases of Japanese material to meet requirements for the present. Accordingly, Japanese trading companies admit a difficult situation for new Taiwanese deals at high prices.
