Japan’s leading EAF steel mini-mill – Tokyo Steel has announced hike in its scrap purchase prices further for its western plants. As per new price circular released, the steel manufacturer has raised prices at Okayama and Takamastsu steel center by JPY 500/MT (USD 5) while it increased bids at Kyushu plant by JPY 1000/MT (USD 9). Prices remain unchanged at major plants like Tahara and Utsunomiya for all grades of scrap. Revised prices shall be effective from tomorrow i.e. 19th Jul’18.
Tokyo steel fetches H2 scrap at JPY 35,500/MT (USD 314) for its Kanto region based works i.e. Utsunomiya and at JPY 35,000/MT for largest works in central Japan-Tahara. After this price hike, bids for the same grade has increased to JPY 33,500/MT levels at Kyushu plant and JPY 33,000/MT at Okayama works in Western Japan while for its Takamatsu Steel Center company keeps bids at JPY 32,500/MT in South Japan.
As per reports, the price hike did not impact much on the market price as its purchase price was lower than local electric furnace makers.
Earlier to this, on 14th July Tokyo Steel increased prices at Western plants almost after three months by upto USD 9. Amid strengthening of domestic prices, Tokyo Steel has hiked prices in order to fetch considerable inventories ahead of scheduled annual maintenance activities at its plants. H2 price gap between Okayama and Utsunomiya plant has narrowed down to JPY 2,500/MT now.
Average H2 scrap export offers from suppliers assessed in the range of 34,500-35,500/MT (USD 305-314) FoB for Kanto region and at around JPY 34,000/MT from Gulf region in Japan.
Tokyo Steel’s scrap purchase prices effective from 19th Jul’18 –
| Scrap Grade | Name of Work of Tokyo Steel | ||||
| Tahara Plant | Okayama Plant | Kyushu Factory | Utsunomiya Factory | Takamatsu Steel Center | |
| Special Class | 35,000 | 33,000 | 33,500 | 35,500 | 32,500 |
| First Grade | 34,500 | 32,500 | 33,000 | 35,500 | 32,000 |
| Second Grade | 33,000 | 31,000 | 31,500 | 34,000 | 30,500 |
| New Cutting Press A | 40,000 | 35,000 | 35,500 | 38,500 | 34,500 |
| Shredder A | 35,500 | 33,500 | 34,000 | 36,000 | 33,000 |
| Shredder C | 35,000 | 33,000 | 33,500 | 35,500 | 32,500 |
Prices in Japanese Yen/MT for transport on land
Source: Tokyo Steel Reports
Japan’s domestic scrap prices remain flat, exports remain sluggish – The inquiries from major EAF steelmakers in Japan remained low and they are likely to remain slow owing to summer production cuts in the country. As the generation of scrap remain sluggish in the country since past few months, EAF steelmakers are expected to increase their scrap purchasing and purchase prices in order to maintain the lowering scrap inventories well before moving towards vacations.
Recently few minor quantity trades heard from overseas importers at stable prices for Japanese scrap however market is likely to remain sluggish amid summer production cuts and maintenance activities at plants.
South Korean demand for Japanese scrap remains weak – Scrap purchase bids placed by major South Korean steelmakers like Hyundai and Dongkuk stands at JPY 33,000/MT, FoB Japan which is still very low as compared to suppliers’ expectations. South Korean scrap demand has prolonged since past few months and it is less likely to pick up further sharply in coming days. Increased price differentials of Japanese H2 and high grade scrap like SB has clearly indicated the changing trends of high grade exports instead of H2.
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