TOKYO Tokyo Steel Manufacturing Co. Ltd. has reduced its buying prices for a 14th time since late August, with a surprisingly large cut of ¥1,000 ($12) per tonne for deliveries to its Okayama Works.
Deliveries to its other four plants were slashed by a more moderate ¥500 ($6.28) per tonne.
The latest cut takes the companys buying prices to ¥23,000 ($289) per tonne for seaborne deliveries to its Okayama factory; ¥22,500 ($283) per tonne for overland deliveries to the plant, as well as all deliveries to its Kyushu, Tahara and Utsunomiya plants; and ¥21,500 ($270) per tonne for those to its Takamatsu facility.
In total, Japans largest electric-arc furnace operator and effective scrap benchmark price-setter has now lowered its scrap buying prices by at least ¥7,000 ($88) per tonne in the past six weeks.
That, in turn, has driven its scrap costs down to their lowest levels in more than three years.
However, market observers have expressed some surprise at the size of the latest cut, as there had been indications that scrap prices might be stabilizing, especially after this past weeks export auction held by Osaka-area dealers saw a slight uptick in prices.
Meanwhile, the average domestic market price of H2 scrap (a mix of No. 1 and No. 2 heavy melt), as measured by the Japan Ferrous Raw Materials Association, remained flat at ¥21,521 ($270) per tonne in the fourth week of October compared with the previous week.
A version of this article was first published by AMM sister publication Steel First.