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Japan's largest electric arc furnace operator and effective benchmark price-setter raised its purchase prices by ¥500 ($6) per tonne.

As a result, it is now paying ¥24,500 per tonne for deliveries to Utsunomiya; ¥24,000 per tonne for seaborne deliveries to its Okayama factory; ¥23,500 per tonne for overland deliveries to the plant, as well as all deliveries to its Kyushu and Tahara plants; and ¥22,500 per tonne for those to its Takamatsu service centre.

The hikes follows a ¥500 per tonne across-the-board increase over the weekend in reaction to last Friday's export tender held by scrap dealers in the Tokyo area that saw their prices shoot up by over 13% from month-earlier levels.

The average winning bid at the tender came in at ¥25,643 per tonne fas.

The big jump took export prices way past domestic prices, leading market-watchers to say that it was only a matter of time before local mini-mills further lifted their purchase prices in response.

On the other hand, scrap prices could be set for a certain level of volatility as the markets struggle between weak demand and rising export prices.