The winning bid in the monthly auction held Tuesday for Japanese H2 grade ferrous scrap for export through Tokyo Bay was Yen 30,910/mt ($299.50/mt) FAS or free alongside ship, the organizer of the tender said.
The bid was Yen 2,100/mt lower than the winning bid in last month's auction but was higher than expected, he said.
The regular monthly auction organized by the Kanto Tetsugen grouping of scrap dealers based around Tokyo saw 26 bids lodged and three accepted, the official said.
The other two were for Yen 30,900/mt FAS and Yen 30,880/mt FAS while the average of the 26 bids was Yen 29,611/mt FAS. Thirteen traders participated in the bidding process.
The winning bid was from Nippon Steel & Sumikin Bussan Corp., the trading arm of Japan's largest steel company Nippon Steel & Sumitomo Metal Corp., and it was awarded 10,000 mt of the material, sources said.
The two runner-up bids for 5,000 mt each were from Sangyo Shinko, another trader affiliated with the integrated giant, they added.
Scrap procurement officials from Nippon Steel & Sumikin Bussan were unavailable while those from Sangyo Shinko declined to comment on the auction.
Market talk indicates that the two traders aim to fill back orders for shipping to Southeast Asia, a Kanagawa-based scrap distributor said.
The winning bids were well above the range that traders are paying scrap dealers for their deliveries wharfside at Tokyo Bay, he added.
Scrap prices in the Kanto region around Tokyo have fallen over the past few weeks because of surplus supply.
Several electric steel makers in the region have stopped production as unseasonal heavy snow blanketed eastern Japan in late February.
Among the mills that saw disruptions in production are Asahi Industries in Saitama, north of Tokyo, and the Funabashi steel works of Godo Steel in Chiba, east of the capital.
Japanese market leader Tokyo Steel Manufacturing slashed its scrap buying prices at its upper Kanto works at Utsunomiya by Yen 2,000/mt from March 10, to take its H2 price there to a new low of Yen 30,000/mt.
Tokyo Steel had refused to accept deliveries of scrap at its Utsunomiya plant from last Wednesday until Monday citing high inventory.
