TOKYO Tokyo Steel Manufacturing Co. Ltd. has raised its scrap purchasing prices by 500 to 1,000 yen ($6 to $11) per tonne for deliveries to its five works effective Thursday.
It is now paying 29,000 yen ($329) per tonne for overland deliveries to its Utsunomiya plant; 28,500 yen ($323) per tonne for both overland and seaborne deliveries to its Kyushu and Okayama facilities, as well as deliveries to its Tahara unit; and 27,500 yen ($312) per tonne for deliveries to its Takamatsu service center.
The latest hike by Japans leading electric-arc furnace operator and effective benchmark price-setter brings prices back to their highest levels since late August. The move is seen by some as an attempt to prevent scrap from being shifted to overseas markets as regional buyers look to take advantage of a weaker Japanese yen.
South Korean mini-mills in particular have stepped up their purchases of Japanese scrap, with prices now hovering near the 30,000-yen-per-tonne f.o.b. mark after SeAH Besteel Corp. and Dongbu Steel Co. Ltd. hiked their purchase prices for local scrap last week by 10,000 to 15,000 won ($9 to $14) per tonne.
Mini-mills have reacted quickly to the rise in scrap prices by being increasingly aggressive in pushing through product price hikes. Prices around Tokyo are taking a particularly bullish tone amid a drop in stockpile levels after producers slashed output.
Tokyo Steel said last month that it will look to hike its prices starting next month. Although it nominally left its listed prices for deliveries this month unchanged, in reality it has effectively lifted its long products prices by 2,000 to 3,000 yen per tonne by saying that it will not be offering any discounts on its tabled prices, sources said.
A version of this article was first published by AMM sister publication Steel First.