TOKYO The rally in the Japanese scrap market is gaining momentum, with Tokyo Steel Manufacturing Co. Ltd. boosting its purchase prices for a third time within a week following a sizable jump in export prices.
Japans largest electric-arc furnace operator and effective benchmark price-setter increased its buying prices by 500 yen ($6) per tonne.
As a result, it is now paying 24,500 yen ($305) per tonne for deliveries to its Utsunomiya Works; 24,000 yen ($299) per tonne for seaborne deliveries to its Okayama plant; 23,500 yen ($293) per tonne for overland deliveries to the plant, as well as all deliveries to its Kyushu and Tahara Works; and 22,500 yen ($280) per tonne for deliveries to its Takamatsu service center.
The latest hike follows an across-the-board increase of 500 yen per tonne over the weekend in reaction to last Fridays export tender by scrap dealers in the Tokyo area, which saw their prices shoot up more than 13 percent from levels seen the prior month.
The average winning bid at the tender came in at 25,643 yen ($319) per tonne f.a.s.
The increase pushed export prices far above the domestic market, leading market observers to predict that it was only a matter of time before local mini-mills responded with further increases in their purchase prices, they told AMM sister publication Steel First.
On the other hand, volatility could be in store for scrap pricing as the market struggles to balance weak demand and rising export prices.
A version of this article was first published by AMM sister publication Steel First.