Japan’s Tokyo Steel has today observed its 3rd successive price hike for scrap purchase in just one week, after the domestic scrap prices began to rebound since 22nd May ’20, following a 5-month continuous downtrend. The company has today increased its bids for domestic scrap by JPY 1000/MT for delivery to Tahara plant and by JPY 500/MT for the other four plants, while the new prices will be effective from tomorrow, 29th May’20.
After the latest price hike, the company will now pay JPY 21,500 /MT (USD 199) for H2 scrap delivered at its Tahara plant in Central Japan, while the new prices for H2 scrap delivery to Utsunomiya plant in the Kanto region and Okayama plant now stand at JPY 20,500/MT and JPY 19,500/MT respectively. Prices for Takamatsu steel Centre and Kyushu works have now risen to JPY 18,500/MT and 19,500/MT respectively.
In a successive uptrend this week, domestic scrap prices have in total climbed up by JPY 3000/MT for Tahara and by JPY 2,000 MT for the other four plants. However, market sources confide that the finished steel market in Japan, although witnessing some improvement, has not underwent a recovery of similar proportions as scrap price hikes are indicating. Thus, the sharp rise in the domestic scrap market may be more on the account of the growing divergence in the domestic prices in comparison to the export offers from Japan till last week.
Japanese export offers have now risen to 24,000/MT FoB for H2 scrap to South Korean mills, observing a considerable rise of over JPY 5,000/MT (27% increase) in just 6 weeks, due to renewed demand from SE Asia, after easing of lockdown restrictions. It is yet to be ascertained, whether the domestic scrap prices, which followed the export price rally, will find support from finished steel demand, as the market keenly watches the trend.
Tokyo Steel Ferrous Scrap Purchase Price from 29th May 2020
| Name of Work of Tokyo Steel | |||||
| Scrap Grade | Tahara Plant | Okayama Plant | Kyushu Factory | Utsunomiya Factory | Takamatsu Steel Center |
| Special Class (H2) | 21,500 | 19,500 | 19,500 | 20,500 | 18,500 |
| First Grade | 21,000 | 19,000 | 19,000 | 20,500 | 18,000 |
| Second Grade | 19,500 | 17,500 | 17,500 | 19,000 | 16,500 |
| New Breaking Press A | 23,500 | 20,500 | 21,000 | 22,500 | 19,500 |
| Shredder A | 23,000 | 20,000 | 20,000 | 21,000 | 19,000 |
| Shredder C | 22,500 | 19,500 | 19,500 | 20,500 | 18,500 |
Price in JPY/MT
Source: Tokyo Steel Reports
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