Japan: Tokyo Steel Scrap Purchase Price Hit 2 Year Low

The steelmaker has lowered the domestic scrap purchase prices by another JPY 500-1000/t today after witnessing 7 price cuts in June month.

As per new price circular released, Japan’s leading EAF mini-mill - Tokyo Steel has further lowered the domestic H2 scrap purchase price by JPY 1000/MT (USD 9) at its Kyushu works while it has lowered the price by JPY 500/MT at its other 4 works, as the downslide in Japanese domestic scrap market has continued for over 3 months now. The new prices for all grades shall be effective from tomorrow (5th Jul'19).

After the said price lowering, the company will pay JPY 26,000/MT (USD 241) for H2 scrap delivered at Tahara plant in central Japan as well as Utsunomiya plant in the Kanto region while JPY 25,500/MT (USD 237) for Okayama plant. For H2 delivered to Kyushu works in the western region and Takamatsu Steel Center, the new prices are JPY 25,000/MT (USD 232) and JPY 24,000/MT (USD 223) respectively.

Due to limited demand for finished steel and low scrap inquiries from overseas importers, market sentiments have remained extremely weak. However with global scrap prices on the rise again, increased inquiries of Japanese scrap at lowered prices from overseas buyers especially from South East Asia, is anticipated.

Current purchase bid by Tokyo Steel is around 2 years low level, as prior to this the H2 scrap price for delivery to Tahara plant was JPY 26,000/MT during mid-June'17.

Japanese domestic scrap prices have fallen by more than JPY 7,000/MT (USD 65) over the last 3 months, as the current H2 prices are hovering around JPY 26,500/MT in Kanto region and central Japan, as against JPY 33,500/MT levels early April, while in June alone the prices dropped by around JPY 3,000-3500/MT.

Following Tokyo's lead, other EAF steelmakers in the Kanto region have also witnessed successive lowering in scrap purchase prices in the last few weeks.

Tokyo Steel’s scrap purchase price effective from 5th Jul'19 -