Electric Furnace Steels Raise Scrap Purchase Prices in Osaka

Some electric furnace steel makers around Osaka increased the ferrous scrap purchase price from the past weekend. Many dealers analyzed the downward mood was solved in the ferrous scrap market which continued since late July around Osaka, although Hirakata plant of Kyoei Steel stopped the electric furnace for the long period on August 17 and Hoshida plant of Shin Kansai Steel stopped the operation of the electric furnace due to the accident of the transformer.Most electric furnace steels around Himeji area already raised their purchase prices for ferrous scrap, increasing the prices for the first time in these 2 months. The market mood changed after Okayama plant of Tokyo Steel Manufacturing increased the purchase price on August 11 before summer holidays in mid August. The plant raised the price again on August 22 and other electric furnace steels followed the movement last week. Okayama plant increased the price to 29,000 yen per tonne for H2 for marine transport and to 28,500 yen for land transport. Yamato Steel increased the price to 27,500 yen for H2, adding 500 yen for the cargo carried from the out of the prefecture.The ferrous scrap purchase price by electric furnace steels is around 26,000-27,000 yen per tonne for H2 around Osaka. The price rose by 5,500 yen per tonne or 26% from the same period of 2005. Dealer source said the price might not increase much more. Yamato Steel’s purchase price is higher by 3,500 yen per tonne from the same period of 2005. Consequently each maker keeps cautious stance.However, the ferrous scrap market enters the demand season of autumn. Electric furnace steels started the price hike in late August of 2005 as well as this year. In this year integrated steel makers are continuing to purchase ferrous scrap from the market. Dealer source prospects that the bottom of makers’ purchase price could surge up gradually.