Electric Furnaces Raise Ferrous Scrap Buy Price, Tokyo

Electric furnace steel makers around Tokyo increased the ferrous scrap purchase price by 2,000 yen to 14,000-15,000 yen per tonne on Wednesday from last week and some pay as high as 16,000 yen. A dealer source said the purchase price may surge more when export price from Tokyo bay exceeds the purchase price around Tokyo.

Dealers’ scrap shipment is slow since the market price plunged last month. Some dealers sell scrap to warehouses at Tokyo bay and some dealers reduce shipment with an anticipation that scrap price could surge up

The demand for ferrous scrap is decreasing when electric furnace steel makers are decreasing their output. However, many dealers said supply and demand balance of ferrous scrap is tight.

Utsunomiya works of Tokyo Steel Manufacturing increased the purchase price by 2,000 yen per tonne on 26 November. Other makers followed the hike. Makers’ purchase price rose by 5,000-6,000 yen per tonne from the bottom in early November.

Ferrous scrap market price increased again around Osaka. 4 steel makers around Himeji raised the purchase price by 1,000 yen per tonne on 26 November following Tokyo Steel Manufacturing’s hike.

Steel makers around Osaka are in wait and see stances. Their purchase price is 15,000-16,000 yen per tonne. They will reduce steel output more. Kishiwada Steel stopped the operation of an electric furnace on and after Tuesday. Nakayama Kogyo will stop the operation of a rolling mill from 23 December to 6 January. The demand for ferrous scrap is expected to decrease soon.

The supply meets the demand when ferrous scrap generation keeps low. A dealer source said the supply and demand may loose due to decreased consumption volume by electric furnaces.