Japan’s Kanto Tetsugen, a monthly auction between a cooperative of scrap dealers in the Tokyo region, closed at ¥29,370 ($276) per tonne fas on Wednesday, up by ¥2,154 per tonne from the previous month.

August’s auction price was itself an increase of ¥3,642 per tonne month on month following strong demand from export markets.

The two highest bids were for 10,000 tonnes of H2 at ¥29,370 per tonne fas and will go to Vietnam, sources said. The price would work out at $310 per tonne cfr Vietnam.

Market participants were highly divided in their valuation of scrap in the Japanese market following the rise in the auction price.

“The tender result was high for scrap dealers in Japan - which traders knew would happen - so there is a wide range of offers in Japan,” one Japanese scrap exporter said.

“I'm not sure about new offers since most dealers are now anticipating further rises in the market. I would say the next target price for H2 will be ¥30,000-30,500 per tonne fob,” a Japanese scrap supplier said.

Offers for H2 were heard at ¥29,500-31,500 per tonne fob on Wednesday, up from ¥28,500-29,000 per tonne fob one week ago.

Fastmarkets’ price assessment for steel scrap H2, export, fob main port Japan was ¥29,500-30,370 per tonne on Wednesday, up from ¥27,500-28,500 per tonne fob last week.

The rise in Japanese prices will require buyers to pay more if they have any hope of securing scrap from the East Asian country, sources said.

“South Korean mills will need to raise prices now. There is not a lot of inventory of domestic scrap at many South Korean mills,” he said.

The Japanese exporter said that higher grades of scrap were ¥3,000-4,000 per tonne above the price for H2.

Offers for Shindachi busheling, which is in high demand from Japanese blast furnace (BF) mills, together with shredded scrap, were heard on Wednesday at ¥32,500-33,500 per tonne fob.

Offer prices for plate and structural (P&S), which is particularly tight in the market, were heard at ¥32,500-34,000 per tonne fob.

Fastmarkets’ price assessments for steel scrap P&S, export, fob main port Japan, steel scrap Shindachi, export, fob main port Japan and steel scrap shredded, export, fob main port Japan all settled at ¥32,500 per tonne fob.

The prices for P&S and Shindachi rose ¥1,500 per tonne week on week, and the price for shredded increased by ¥2,000 per tonne.