- Tokyo Steel cuts scrap purchase prices at Tahara
- Supply constraints may curb deeper price drop
Japan Metal Daily: Japan’s domestic steel scrap market is bracing for further softening as electric arc furnace (EAF) producers begin seasonal production cuts from early July. The slowdown in end-user demand has forced many EAF mills to reduce operations, curbing scrap consumption and pressuring prices downward.
Tokyo Steel responds with price cuts
Tokyo Steel recently reduced its scrap purchase prices, which serve as a key bellwether for market trends, indicating lower consumption in the coming days. The company reduced purchase prices at its Tahara plant by JPY 500/t on 28 June, the first cut at the site in about two months.
According to Hirotsugu Katayama, chief of the purchasing department, June’s prices were steady due to high production in the Chubu region, but a downturn is now expected, as EAF mills scale back output in July for power-saving measures.
Regional price trends
- Western Japan: Totetsu kept purchase prices stable for weeks after earlier cuts at the Kyushu, Okayama, and Kansai yards. However, two weeks ago, an EAF mill in the Osaka area trimmed its buying prices by JPY 500/t, triggering similar moves from nearby mills adjusting inventories ahead of planned summer maintenance shutdowns.
- Chubu and Kansai: Amid recent price declines, market sentiment remained cautious, and further reductions cannot be ruled out.
- Kanto: So far, the Kanto market has been relatively stable, hovering in a wait-and-watch mode for about two months. As of 1 July, H2 scrap was traded at around JPY 40,000-41,500/t ($278-288/t) in Kanto and JPY 40,000-41,000/t ($278-285/t) in Kansai, with minimal regional price gaps.
Tight supply dynamics may limit declines
While price pressure persists, extreme summer heat has hampered scrap collection and shipments in urban areas, causing localised shortages that could partially offset the downtrend. Another potential factor influencing Kanto supply dynamics is the imminent loading of a 20,000-t shipment won in the June Kanto Tetsugen tender, which could tighten regional availability.
Outlook
Overall, Japan’s domestic scrap market is entering July under bearish pressure, with slower EAF operations and subdued steel product demand expected to drive further price adjustments. Yet regional variations and weather-related supply constraints mean prices may not collapse sharply in the near term.
Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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