IRON and STEEL
Scrap & Recycling
With recent price hike by JPY 500/MT, H2 scrap prices at Utsunomiya works have hit 3 months high
As per new price circular released, Japan’s leading EAF steel mini-mill - Tokyo Steel has raised domestic scrap purchase price further by JPY 500/MT (USD 5) at all five works effective from tomorrow (26th Feb). The steelmaker has raised scrap prices successively for the fifth time in Feb'19 on strong sentiments and tight scrap supply in Japan.
The company will pay JPY 33,500/MT (USD 303) for H2 scrap delivered to Utsunomiya plant situated in the Kanto region. While revised H2 price stands JPY 32,500/MT at the largest plant Tahara in the central area, JPY 28,500/MT at Takamatsu steel center, JPY 33,000/MT for Kyushu works and JPY 30,500/MT at Okayama works.
The average H2 offers assessed in the range JPY 33,000-34,000/MT (USD 298-307), FoB Tokyo and collection rates in the Gulf region remained flat in the range JPY 31,500-32,500/MT. Following rising outlook on local scrap prices, Japanese scrap suppliers turn cautious to supply more and export offers are limited with anticipation of Kanto region prices to remain strong till early Mar'19.
According to scrap price indices reported by the Japan Iron & Steel Association, domestic scrap prices have sharply moved up by JPY 500-1500/MT last week in the different regions like Kanto, Central and Western. Following Tokyo's lead, many EAF steelmakers have hiked scrap prices recently.
According to SteelDaily's report, a South Korean steelmaker recently contracted for 4,000 MT of Shindachi scrap at JPY 37,500/MT, FoB which is equivalent to JPY 29,500/MT for H2. The supplier could have sold at a low level as compared to current market prices on less clarity about Hyundai's resumption of demand for Shindachi scrap and rising stocks in hand. Market participants are expecting the price hike to be short term.