Japanese ferrous scrap prices were under downward pressure amidst weak domestic finished steel demand in the country.
Tokyo Steel decreased its domestic scrap purchase price four times in eight days. Since Feb 4, Tokyo steel reduced its purchase price by a total of JPY3,000-3,500/mt ($27-32/mt).
In its latest price cut announced on Feb 12, the mill lowered scrap prices for all grades at its five plants by JPY1,000/mt ($9/mt) effective Feb 13. It will pay JPY20,500/mt for #2 HMS scrap del Tahara and JPY20,000/mt down JPY1,000/mt at Utsunomiya plant in Kanto region. Bids for #2 HMS in Kyushu, Okayama and Takamatsu were revised to JPY20,000/mt, JPY19,000/mt and JPY18,000/mt, respectively. The price cut on Feb 12 is the seventh since Jan 25.
Prices for Japanese origin scrap also fell in seaborne trades driven by a decline in domestic prices. Scrap grade #2 HMS traded at JPY21,500-22,000/mt fob Japan, down JPY1500-2000/mt from the prior week.
The weekly Davis Index for #2 HMS scrap lowered to JPY21,750/mt ($198/mt) fob Japan on Wednesday, down from JPY23,500/mt fob Japan. The Davis Index for Busheling settled at JPY24,250/mt fob Japan on Wednesday, down JPY1750/mt from the prior week. Busheling traded at JPY24,000-24,500/mt fob Japan.
Japanese H1:H2 in small bulk cargoes traded at $240-245/mt cfr Vietnam.
Japan’s monthly scrap export tender, Kanto Tetsugen concluded on Feb 12 with average bids down by JPY3,916/mt ($36/mt) from the prior month. The tender sold 25,200mt of #2 HMS t with the average winning bids at JPY22,751/mt ($216/mt) fas Tokyo Bay, down from 26,667/mt ($244/mt) in January.
Market participants had mixed opinions on price directions. Average bids in Kanto’s tender were higher by around JPY1750/mt compared to Tokyo Steel’s scrap purchase price at Utsunomiya plant at JPY21,000/mt on Feb 12.
Because the Kanto tender is positioned to sell immediately, it might have fetched higher prices, said a trader. Kanto bids higher than current fas levels could not be an indicator of the real market situation. Tokyo Steel’s price cut on Wednesday reflect the present price levels better, a market source said.