The main EAF-based steel producer in Japan, Tokyo Steel, has continued to cut local procurement scrap prices today, May 18, in its fifth cut announced in May. The local scrap decrease has intensified lately amid weaker demand, while the export market has remained bearish with lower bids than seen domestically in Japan, SteelOrbis has learned.
This time, Tokyo Steel has lowered local scrap purchase prices for its Utsunomiya plant by JPY 1,500/mt or $12/mt, while for the other four plants the decrease is JPY 1,000/mt ($8/mt).
Tokyo Steel’s new price range for H2 scrap has come to JPY 59,000-60,500/mt ($457-468/mt) depending on the mill. The higher end of the range still corresponds to Utsunomiya Works, which is in the Kanto area and is usually used by Japanese exporters in assessment of the export market price. The Shindachi scrap prices of Tokyo Steel are at JPY 61,500-65,000/mt ($476-503/mt). All prices are delivered and effective from May 19.
Together with the downtrend in the local market, demand for ex-Japan scrap in the international market has remained limited. “We are not buying either Japanese or Russian scrap due to the good scrap flow in the local market,” a buyer from South Korea said, adding that suppliers from Russia are still actively seeking customers.
Moreover, the tradable level for the ex-US HMS I/II 80:20 scrap price has been assessed by market sources at around $500/mt CFR in Vietnam and South Korea, and, even though this is just an assessment, not the real transaction, sources believe that Japanese suppliers will have to cut prices to this level at least in order to attract some demand. The level of $500/mt CFR in Vietnam translates to around JPY 58,000/mt ($449/mt) FOB from Japan.
As for now, the SteelOrbis reference price for ex-Japan H2 scrap has decreased further to JPY 60,000-60,500/mt ($464-468/mt) FOB, down by JPY 1,000-1,500/mt ($8-12/mt) from last week. In the current conditions, market sources believe that prices will continue to go down.
|
Plant |
H2 |
Shindachi |
||
|
Price (JPY/mt) |
Price change (JPY /mt) |
Price (JPY/mt) |
Price change (JPY/mt) |
|
|
Tahara |
60,000 |
-1,000 |
65,000 |
-1,000 |
|
Okayama |
60,000 |
-1,000 |
63,500 |
-1,000 |
|
Kyushu |
60,000 |
-1,000 |
62,000 |
-1,000 |
|
Utsunomiya |
60,500 |
-1,500 |
62,500 |
-1,500 |
|
Takamatsu |
59,000 |
-1,000 |
61,500 |
-1,000 |
$1 = JPY 129.14