Slow Ferrous Scrap Market in Tokyo, Osaka

Ferrous scrap market is leveling off around Tokyo and Osaka after the rebound. The market interests started to anticipate slower demand could result in another drop in the market when Japanese scrap export is very low level due to weak offshore demand. Local steel makers around Tokyo keep the scrap purchase price at 43,000-45,000 yen per tonne for H2 since mid-September. Scrap inventory at yard dealers around Tokyo bay increases due to slower export shipping when offshore buyers are reluctant to buy high priced Japanese scrap. Ferrous scrap market is also weak around Osaka when local steel makers reduce the consumption under slower demand despite of the tight local supply. The makers pay 46,500-47,500 yen per tonne for H2 grade. However, the local dealers expect the makers could reduce the purchase price after Tokyo Steel Manufacturing reduced the purchase price effective on October 1. However, demand for high grade scrap including HS and new cutting grade is still firm due to offshore makers’ strong appetite. The FAS price from Tokyo bay is still around 10,000 yen per tonne higher than purchase price by local makers. The strong demand keeps local tight supply for high grade scrap.