The winning bid in the monthly auction held Wednesday for Japanese H2 ferrous scrap for export from Tokyo Bay was Yen 32,610/mt ($319.70/mt) FAS or free alongside ship, the organizer of the tender said.
The bid was Yen 1,700/mt higher than the winning bid in last month's auction and the increase had been expected, he said.
The regular monthly auction organized by the Kanto Tetsugen grouping of scrap dealers based around Tokyo saw 25 bids lodged and three accepted, the official said.
The other two were for Yen 32,300/mt FAS and Yen 32,210/mt FAS, while the average of the 25 bids was Yen 31,473/mt FAS.
The winning bid was from Itochu Metals Corp. for 10,000 mt, the second from JFE Shoji Trade, the trading arm of JFE Steel, for 5,000 mt, and the third from Sangyo Shinko, a trader affiliated with Nippon Steel & Sumitomo Metal Corp., for 5,000 mt.
Scrap procurement officials from Itochu Metals and Sangyo Shinko declined comment on the auction, while those from JFE Shoji Trade were unavailable.
"The winning bids were much higher than prices traders are currently paying to collect H2 material to be exported in the Tokyo Bay area, at Yen 30,500-31,000/mt FAS; we believe winners expect prices to rise further and secured material at auction," a Tokyo-based scrap trader said.
Inquiries from South Korean mills, a major consumer of Japanese scrap, have been quiet recently as they had high stocks, sources in Seoul said.
Some Japanese traders said the most recent inquiry from a South Korean mill was from Daehan Steel at Yen 32,500/mt FOB last week, but Daehan sources confirmed the company had not made a booking as of Wednesday. Scrap prices in Japan have been on an uptick since early April. Major Japanese mini-mill Tokyo Steel Manufacturing has lifted its scrap buying prices for all grades three times to date in April, by Yen 500-3,000/mt. The company raised the H2 grade scrap price at its Utsunomiya works in northern Kanto Tuesday by Yen 1,000/mt to Yen 32,000/mt.
