Japan: Tokyo Steel Observes Further Price Cut for Scrap Purchase

As per new price circular released, Japan’s leading EAF mini-mill - Tokyo Steel has again lowered the domestic H2 scrap purchase price by JPY 1000/MT (USD 9) at Kyushu works in western region, and by JPY 500/MT for its other 4 works, amid very weak sentiments in the domestic market. The new prices for all grades shall be effective from tomorrow (21st Jun'19).

After the said price cut, the company will pay JPY 28,000/MT (USD 260) for H2 scrap delivered at Tahara plant in central Japan while JPY 27,000/MT (USD 251) and JPY 26,000/MT (USD 241) for Okayama plant and Takamatsu steel centre respectively. For H2 scrap delivered to Kyushu works in the western region, the JPY 1000/MT price cut brings the new price to JPY 27,500 (USD 255), the same as price for Utsunomiya plant in the Kanto region.

As per the data maintained with SteelMint since 2017, after the said price lowering the H2 scrap price for Okayama Plant has also reached the lowest level in 2 years, along with price for Tahara and Utsunomiya plant. The company has further reduced the price of "New breaking Press A" scrap delivered to both Tahara plant and Kyushu works by another JPY 1000/MT, as the difference between high-grade and low grade scrap (H2) for all works has now narrowed to just JPY 2000/MT, amid limited demand of high-grade scrap.

With the downslide in the domestic scrap prices persisting for over 2 months now, this is the company’s 2nd Price cut in 3 days, as South Korea’s Hyundai Steel also lowered it’s bid for Japanese scrap by JPY 1000/MT earlier today. Notably, Japanese index of H2 scrap for this week also fell by JPY 800/MT W-o-W, with the average H2 scrap price currently standing at JPY 27,100/MT. With recent lowering of finished steel prices by the company after a gap of 2 and a half years, there are currently no major reasons indicating any stability in Japanese domestic scrap prices in the immediate future.