As per new price circular released, Japan’s leading EAF mini-mill – Tokyo Steel has further lowered its domestic scrap purchase price by JPY 1000/MT (USD 9) at Okayama plant and by JPY 500/MT (USD 5) at its Tahara Plant, Kyushu works and Takamatsu Steel Centre respectively while keeping the prices for Utsunomiya unchanged. The new prices for all grades shall be effective from tomorrow (23rd Aug’19).
After the said price cut, the company will pay JPY 24,000/MT (USD 225) for H2 scrap delivered to Okayama plant and for Utsunomiya unchanged at JPY 26,500/MT while for H2 delivered to Tahara plant in the central region, Kyushu works in the western region and Takamatsu Steel Center the prices now stand at JPY 25,500/MT (USD 240), JPY 24,500/MT (USD 230) and JPY 22,500/MT (USD 211) respectively.
Notably, price for higher grade scrap New Breaking Press A delivered to Tahara plant was further lowered by JPY 1000/MT.
Prior to this, the steelmaker had decreased scrap purchase prices for 2 of its works on 7th Aug’19. One of the reasons for these price cuts is being considered as a significant appreciation of the Japanese yen against US Dollar, which had strengthened to 105 levels earlier this week from 108-109 range in Jun-Jul’19 . Apart from this, the finished steel demand has remained low in the country, creating pressure on steelmakers to adjust their margins and procure at lower prices.
Although Japanese suppliers had increased the export offers of scrap to overseas markets, in the hopes of improving the domestic sentiments, however, the hike in prices was met with severe resistance from major importers like South Korea, and consequently, no major export deals to the country were observed in over a month.
South Korean steelmaker Hyundai Steel has recently been reported to enter into individual negotiations with Japanese suppliers, keeping its purchase bids at JPY 27,000/MT, FoB. However, increasing trade tensions between the 2 countries likely to disrupt trade flow and it remains to be seen how the market dynamics play out.
Tokyo steel’s scrap purchase price effective from 23rd Aug’19
| Scrap Grade |
Name of Work of Tokyo Steel |
| Tahara Plant |
Okayama Plant |
Kyushu Factory |
Utsunomiya Factory |
Takamatsu Steel Center |
| Special Class (H2) |
25,500 |
24,000 |
24,500 |
26,500 |
22,500 |
| First Grade |
25,000 |
23,500 |
24,000 |
26,500 |
22,000 |
| Second Grade |
23,500 |
22,000 |
22,500 |
25,000 |
20,500 |
| New Breaking Press A |
27,000 |
26,000 |
26,500 |
28,500 |
24,000 |
| Shredder A |
27,000 |
24,500 |
25,000 |
27,000 |
23,000 |
| Shredder C |
26,500 |
24,000 |
24,500 |
26,500 |
22,500 |
Prices in JPY/MT,
Source: Tokyo Steel Reports
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