TOKYO Tokyo Steel Manufacturing Co. Ltd. has cut its ferrous scrap purchase prices for the first time since late October, confirming signs of a weakening price trend.
Japans largest mini-mill operator and effective benchmark price-setter has reduced its buying prices for deliveries of all grades of scrap to its Tahara plant by 500 yen ($5.50) per tonne and deliveries to its other four works by 1,000 yen ($11) per tonne.
The company is now paying 34,500 yen ($371) per tonne for deliveries to Tahara; 34,000 yen ($366) per tonne to its main Utsunomiya plant; 33,500 yen ($360) per tonne for those to its Okayama and Kyushu facilities; and 32,500 yen ($349) per tonne for deliveries to Takamatsu.
"The price cut by Tokyo Steel is not so surprising, as scrap prices appear to have started to weaken recently. Demand is not so strong," one trader told AMM sister publication Steel First.
Tokyo Bay scrap prices reportedly were down 500 yen last week to 33,500 to 36,000 yen ($360 to $387) per tonne f.a.s., depending on the grade, and there also were reports that South Korean mills such as Hyundai Steel Co. Ltd. and Posco Processing & Service Co. Ltd. were reducing their buying prices.
Tokyo Steels purchasing prices had increased as much as 12,000 yen ($129) per tonnearound 50 percentsince early November, which combined with lower product prices has taken a toll on the company.
Tokyo Steels Tahara plant near Nagoya has been forced to pare production to 60 percent of its forecast at the start of the year, and the company last month announced a 128-billion-yen ($1.38-billion) impairment charge that will widen its net loss for the fiscal year ended March 31 to 146 billion yen ($1.57 billion).
A version of this article was first published by AMM sister publication Steel First.