Scrap purchase prices increased by JPY 500/MT at three western works of Tokyo Steel amid tight supply, low stocks in hand and high domestic prices in Japan.
Japan’s leading EAF steel mini-mill – Tokyo Steel has observed its sixth successive price revision in its scrap purchase prices until now in Sept’18. As per new price circular released, the steel manufacturer has raised prices by JPY 500/MT (USD 5) at its three western Japan (namely Okayama, Kyushu and Takamatsu Steel centre) based plants amid tight supply. While prices at the largest work in central Japan-Tahara and Kanto region based works i.e. Utsunomiya kept unchanged as against last set of prices. The revised prices shall be effective from tomorrow i.e. 21 Sept’18.
Tokyo Steel’s H2 scrap prices stand at JPY 38,000/MT (USD 339) for Okayama and Kyushu, which have surpassed prices at two major plants Tahara and Utsunomiya at JPY 37,500/MT the first time. While bids for the same grade remained at JPY 37,500/MT for its Takamatsu steel center in Southern Japan.
Japanese market observed three days of consecutive holidays from 15th to 17th September last week and again in this week it is likely to witness the Autumnal holidays in between 22nd to 24th Sept. Thus EAF steelmakers plan to increase the production volume by intensive operation during the weekend amid cheap electricity prices.
Tokyo Steel increased operation hours amid three consecutive days of continuous working last week so buying of scrap has strengthened to secure the necessary amount amid low inventories in hand.
Prices at Okayama and Kyushu plants have reached almost last 18 months high in Japan on tightened availability and increased domestic demand for Olympic 2020 construction activities.
Tokyo Steel’s scrap purchase prices effective from 21 Sept’18 –
| Scrap Grade | Name of Work of Tokyo Steel | ||||
| Tahara Plant | Okayama Plant | Kyushu Factory | Utsunomiya Factory | Takamatsu Steel Center | |
| Special Class | 37,500 | 38,000 | 38,000 | 37,500 | 37,500 |
| First Grade | 37,000 | 37,500 | 37,500 | 37,500 | 37,000 |
| Second Grade | 35,500 | 36,000 | 36,000 | 36,000 | 35,500 |
| New Cutting Press A | 42,500 | 40,000 | 40,000 | 41,000 | 39,500 |
| Shredder A | 38,000 | 38,500 | 38,500 | 38,000 | 38,000 |
| Shredder C | 37,500 | 38,000 | 38,000 | 37,500 | 37,500 |
Prices in Japanese Yen/MT for transport on land
Source: Tokyo Steel Reports
Japan’s domestic scrap prices move up further – The purchase price of H2 from EAF steelmakers remained in the range of JPY 36,500-37,500/MT in Japan. H2 scrap prices in Gulf region assessed at JPY 34,500-35,000/MT, However, price expectation has been stepped up to JPY 35,500-36,000/MT now amid decent shipments happening in the market.
In the Kanto region, a solid shipment of about 50,000 MT is scheduled in upcoming days. In addition, manufacturers’ scrap inventory has become low. With continued mild supply in the market, manufacturers are looking to secure the scrap stock necessary for the three consecutive day’s operation this weekend, thus supply and demand situation is tightening. For the immediate future there are many reasons to expect a tight supply and demand which has resulted in abnormal increase in scrap prices in Japan.
Tokyo steel’s high scrap prices and tightened supply in Japan are becoming burden for few steelmakers with lower buying interest than current market levels and they likely to wait till Japanese prices come down to global price levels.
Leave a Reply