Japan: Tokyo Steel's 3rd Price Cut in Scrap Purchase for June

As per new price circular released, Japan’s leading EAF mini-mill - Tokyo Steel has lowered the domestic H2 scrap purchase price by JPY 500/MT (USD 5) at all five works in Japan. New prices for all grades shall be effective from tomorrow (19th Jun'19)

The price cut comes after the company slashed its finished steel prices yesterday (17th June) by JPY 3000-5000/MT amid continued weak sentiments in the domestic finish steel market.

With the recent price cut, the company will pay JPY 28,500/MT (USD 263) for H2 scrap delivered at Tahara plant in central Japan and Kyushu works in the Western region while JPY 27,500/MT (USD 254) and JPY 26,500/MT (USD 245) for Okayama plant and Takamatsu steel center respectively.

For H2 scrap delivered to Utsunomiya plant in the Kanto region, the new price has moved down to JPY 28,000/MT (USD 259). Due to high-grade scrap's limited demand, the company has lowered the price of "New breaking Press A" scrap delivered to Tahara plant by another JPY 1000/MT, further narrowing the difference between low-grade scrap (H2) and high-grade scrap to just JPY 2500/MT.

This is the company’s 3rd successive price cut by JPY 500/ MT in Jun ‘19, while the company has successively observed lowering in scrap purchase prices 11 times since before the Golden week holidays in Apr‘19. With low demand for ferrous scrap being reported for several weeks now, there are no indications of price the domestic scrap prices to stabilize in coming days, especially after the reduction in finished steel prices.

Tokyo Steel slashes July finished steel prices; observes first cut since Oct'16 - The company reduced finished steel prices for July deliveries yesterday on account of lower export offers to Japan from overseas, while also keeping in mind the US-China trade dispute’s impact on steel sector. SS400 H beam price currently stands at JPY 85,000/MT and SPHC hot-rolled coil at JPY 69,000/MT, reducing by JPY 4,000/MT and JPY 5,000/MT respectively.