Ferrous Scrap Price Keeps High in Tokyo and Osaka

Ferrous scrap market kept increase trend in the year in Tokyo and Osaka under firm demand from domestic electric furnace and integrated steel makers. The market price in Tokyo dropped in April with adjustment in offshore market. Some electric furnaces around Tokyo reduced the price in the end of April. The price is expected to be in range of 35,000-40,000 yen around Osaka under strong domestic demand. Local makers around Tokyo pay 35,500-36,000 yen per tonne for H2 grade scrap, which is 4,000 yen or 13% higher than a year earlier. The scrap purchase price by makers around Osaka is 38,000-39,500 yen, which is 7,250 yen or 23% higher than a year earlier. The scrap market price increased in Osaka from the beginning of the year under tight supply. The supply decreased from other areas due to strong demand from offshore buyers. Local makers’ purchase price jumped by 3,500 yen per tonne in March when local makers increased the output by 20% from a year earlier. The price decreased in April after the supply increased from Tokyo. Scrap purchase price by steel makers around Tokyo started to increase since early February when South Korean buyers increased the purchase price. South Korean aggressive purchase got scrap supply around Tokyo tighter and steel makers around Tokyo increased the purchase price by 2,500 yen per tonne in March. Scrap market price peaked in mid-April due to slower offshore market. However, the market price kept the high level when local makers tried to build scrap inventory toward a-week long holiday in early May and the shipping from Tokyo increased to higher market around Osaka. With lower scrap export from Tokyo, local supply got easy and local stele makers reduced the purchase price by 500-1,000 yen per tonne in late April.