Japan: Tokyo Steel Cuts Scrap Purchase Price by USD 5-9

The steelmaker has lowered its domestic scrap purchase price for two of its works, on account of recent currency appreciation of Japanese Yen against US Dollar.

As per new price circular released, Japan’s leading EAF mini-mill - Tokyo Steel has lowered its scrap purchase price by JPY 500/MT (USD 5) and JPY 1000/MT (USD 9) at its Okayama plant and Takamatsu Steel Centre respectively, while keeping the prices for the other 3 works unchanged. The new prices for all grades shall be effective from tomorrow (7th Aug'19).

Prior to this, the steelmaker had increased scrap purchase prices for Utsunomiya plant 2 weeks ago on account of an upturn observed in domestic scrap prices, however unexpectedly, the recent price cut has been observed by the company. The appreciation of JPY in the last few days is being ascertained as the main reason for the said price lowering by the company, while the same was learned from the company sources. The JPY has now appreciated to 106 levels against USD, as against 108-109 levels during earlier 2 months.

After the price cut, the company will pay JPY 25,000/MT (USD 235) for H2 scrap delivered at Okayama plant and JPY 23,000/MT (USD 236) for Takamatsu Steel Center. For H2 delivered to Tahara plant in the central region, Kyushu works in the western region and Utsunomiya plant in Kanto region, prices remained unchanged at JPY 26,000/MT (USD 244), JPY 25,000/MT and JPY 26,500/MT (USD 249) respectively.

On analyzing the current scenario, any further sharp lowering in prices seem unlikely as the Japanese scrap market is expected to await for Kanto Tetsugen tender’s outcome scheduled this week. Domestic scrap prices have marginally increased along with increased export offers last week but small price adjustments are expected following volatile currency.