After slashing scrap purchase prices twice in the last week, Tokyo Steel mill has cut scrap purchase prices further by JPY 500-1000/MT (USD 5-9) amid anticipations of sharp price fall in monthly scrap export tender ‘Kanto Tetsugen’ in Japan.
Japan’s leading EAF steel mini-mill – Tokyo Steel has cut its domestic scrap purchase prices by Japanese Yen 500-1000/MT (USD 5-9) further. As per new price circular, the steel manufacturer has lowered purchase price for domestic scrap by JPY 500/MT (USD 5) at its Tahara factory. While for its other plants in Utsunomiya, Okayama, Kyushu and Takamatsu Steel Centre bids have come down by JPY 1000/MT (USD 9). The revised prices shall be effective from tomorrow i.e. 10 Apr’18.
Now H2 scrap fetches JPY 35,000/MT (USD 327) at largest work in central Japan-Tahara. While the same grade fetches JPY 33,500/MT (USD 313) at Utsunomiya works in north Japan. While for its Okayama plant, Kyushu factory Takamatsu Steel Center Company bids are at JPY 32,000/MT at JPY 32,500/MT and JPY 31,500/MT respectively.
In last seven days period, Tokyo Steel mill observed three price cuts successively on 04th, 6th and 10th April. Through these price cuts H2 scrap prices have dropped by JPY 3000/MT (USD 28) for Utsunomiya plant which comes in Kanto region. While for other four works scrap purchase prices moved down by JPY 2000/MT (USD 19) each in a week’s time.
Thus the H2 price gap between Tahara plant in central region and Okayama plant in Kansai region widened to JPY 3000/MT (USD 28) while that of by JPY 1500/MT (USD 14) in compare with Utsunomiya plant in north Japan.
After the recent price cut, H2 scrap prices in Tahara plant have dropped to nearly 5 months low as the price of JPY 35,000/MT was last seen on 14 Nov’17 in Tahara.
Tokyo Steel’s scrap purchase prices with effective from 10 Apr’18 –
| Scrap Grade | Name of Work of Tokyo Steel | ||||
| Tahara Plant | Okayama Plant | Kyushu Factory | Utsunomiya Factory | Takamatsu Steel Center | |
| Special Class | 35,000 | 32,000 | 32,500 | 33,500 | 31,500 |
| First Grade | 34,500 | 31,500 | 32,000 | 33,500 | 31,000 |
| Second Grade | 33,000 | 30,000 | 30,500 | 32,000 | 29,500 |
| New Cutting Press A | 39,000 | 34,000 | 34,500 | 35,500 | 33,500 |
| Shredder A | 35,500 | 32,500 | 33,000 | 34,000 | 32,000 |
| Shredder C | 35,000 | 32,000 | 32,500 | 33,500 | 31,500 |
Prices in Japanese Yen/MT for transport on land
Source: Tokyo Steel Reports
Bids in ‘Kanto Tetsugen’ tender are expected to come down sharply –
According to sources, it is quite clear that bids in monthly scrap export tender ‘Kanto Tetsugen’ are expected to move down sharply. For this month, Kanto tender is scheduled on 11th Apr’18. Most of the market participants are waiting for this tender to get clear direction in the market.
In last one month’s time, scrap prices in Tokyo Steel’s Utsunomiya work have lowered around JPY 3500 (USD 33) which is located in the Kanto region. Thus in line with this, the bids for Kanto tender may witness reduction.
Japan’s domestic prices fell by JPY 800-1500/MT in all major regions like Kanto, Kansai and Central Japan. Also, export prices kept weakening in line with depressed import bids for Japanese scrap by leading South Korean steelmakers and falling global prices in international markets.
Average purchase prices for scrap by leading EAF steelmaker’s based in Tokyo, Osaka and Nagoya regions in Japan last assessed at JPY 34,300/MT for H2 and at around JPY 38,100/MT for New cutting press respectively.
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