Kanto Tetsugen's latest monthly export auction settled higher for Japanese H2 grade scrap from Tokyo Bay, Kallanish notes. The winning bids reflect the strong market uptrend over the past month. But some trading participants regard them as too high amid a sudden change in market sentiment earlier this week.

The Kanto Tetsugen Cooperative Association auction on 10 March awarded Sangyo Shinko two 5,200-tonne parcels at JPY 43,060/tonne ($396/t) fas for H2 grade scrap. It also awarded a 5,000t lot to Okaya & Co at JPY 42,800/t. The tender’s average winning bid price of JPY 42,976/t is JPY 3,705/t higher than last month’s tender. The association announced that 15 companies submitted bids for a total of 122,600t.

Some market participants deem the award prices as too high. The Kanto tender scrap cargo would be priced at around $460/t cfr Vietnam, says a Vietnamese trader. "The price is extremely high; no one can accept this level," he says.

Offers to Vietnam slipped to $455-460/t cfr on 9 March. "Prices are definitely weakening at the moment," says another trader. "Scrap prices peaked last week; offer prices are coming down by $5-10/t for all grades," a regional trader notes for the Asian scrap market.

In the Japanese domestic market, the direction for ever-rising scrap prices has reversed. Tokyo Steel has lowered its scrap procurement price for H2 grade scrap by JPY 500/t to JPY 42,000/t trucked to its Utsunomiya steelworks effective 11 March. The Japanese mill has been continuously hiking prices since last month, resulting in values moving up to the recent peak of JPY 42,500/t from JPY 29,000/t prior to 13 February.