Tokyo Steel hikes its local scrap purchase prices further

Having increased its local scrap procurement prices by $51-60/mt in total in its announcements since March 9, the main EAF-based steel producer in Japan, Tokyo Steel, has continued to raise its scrap procurement prices. Today, March 23, the company has announced another increase in purchase prices for H2 and shindachi scrap for all its plants by JPY 1,000/mt.

Tokyo Steel’s new price levels for H2 scrap are now in the range of JPY 63,000-64,000/mt ($521-529/mt), while for shindachi scrap they are at JPY 65,500-69,000/mt ($541-571/mt). All prices are delivered and effective from March 24. Amid the depreciation of the Japanese yen against the US dollar, the increases in prices on yen basis have only resulted in a $1/mt rise in dollar-based prices.

Following the US decision to start increasing its interest rates, the Japanese yen has hit 120 to the dollar, which is a six-year low. The Bank of Japan has maintained its monetary policy but has warned that Russia’s invasion of Ukraine may lead to a slower economic revival for Japan since it is destabilizing financial markets and increasing raw material prices. Meanwhile, last week’s earthquake in Japan has hit the country’s power structure. As a result, in some regions the government has issued an urgent call to save energy. The earthquake hit six thermal plants, and the damage may keep the plants idle for weeks, according to local authorities. According to Bloomberg, Japan’s available power capacity has decreased since March 2016 “as utilities retire pricey plants.”

$1 = JPY 120.93