Japan: Scrap purchase in Kanto region fall another Yen 1,000/t ($8/t)

The purchase price of steel scrap by electric furnace manufacturers in the Kanto region fell by another Yen 1,000 /tonne (t).

Due to the favourable supply scenario, Tokyo Steel's Utsunomiya plant reduced the purchase price of all scrap grades by Yen 1,000/t from 5 April. Other manufacturers also moved to reduce the prices by Yen 500-1,000/t. As of 5 April, the manufacturers' actual purchase prices for H2 grade are Yen 51,000~52,000/t.

Due to the stagnation in fresh exports, some shippers stopped receiving shipments, and some of the Gulf prices fell below Yen 50,000/t. Even after the start of the new fiscal year, supply and demand in the region have not been tightened, and many believe that they are still on a downtrend.

As of 5 April, the Gulf prices for H2 are at around Yen 49,000~50,500/t. Some of the prices remain even higher at yen 51,000/t, but it is being said that "it is only a matter of time before the high prices rationalize", and the Gulf prices will start falling ahead of the mills' buying prices.

An official at Tokyo Steel, while explaining the reason behind the price reduction said: "There are very strong arrivals (supply) at each plant." In particular, the Utsunomiya plant, which has a strong momentum in incoming shipments, reduced the purchase prices by Yen 1,000/t, which is the steepest compared to other mills which saw a reduction by Yen 500/t.

Although there is a strong sense of shortage among commercial yard operators in the northern Kanto area, the sales destinations have narrowed due to the suspension of cargo at the bay area and the cargo restrictions on electric furnace manufacturers.

On the other hand, the fact that the Kanto Railway Source Cooperative Association is scheduled to load 6,000 t in 5-10 days and 15,000 t in 11-24 days is a supporting factor in terms of supply and demand.

Tokyo Steel lower scrap purchase prices by Yen 1,000/t

Tokyo Steel scrap purchase prices fell by another Yen 1,000/t. The market price for wholesale special grade (H2) is at Yen 41,000-42,000/t. The manufacturer's actual bid price (same) is Yen 51,000-52,000/t.

Even after the start of the new fiscal year, electric furnace manufacturers continue to receive enough stocks. Supply and demand in the area still lack a sense of balance, as restrictions on receiving goods continue due to supply exceeding the required amount. In order to control arrivals, Tokyo Steel's Utsunomiya Plant lowered its bid price by Yen 1,000/t from 5 May, while the market prices also weakened.

Note: This article has been published in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.