Ferrous Scrap Price Hits First Decrease in 2 Months in Tokyo, Osaka

Ferrous scrap market price decreased in Tokyo and Osaka. Tokyo Steel Manufacturing reduced ferrous scrap purchase price by 500-1,000 yen per tonne for all plants on Saturday. The market price in Tokyo and Osaka decreased for the first time in about 2 months. The price would decrease more due to higher scrap inventory held by local electric furnace steel makers and less appetite by integrated steel makers.

Local electric furnace steel makers pay around 31,500-32,500 yen per tonne for H2 grade around Tokyo. Tokyo Steel announced the purchase price decrease for Utsunomiya plant on Friday, which was the first price cut since November 5. Other local electric furnaces followed the move to reduce the price by 500-1,000 yen by Monday.

Some local electric furnaces hold overstock of scrap when the makers increased the purchase in late December. One trading firm source sees the makers were reluctant to buy normal scrap volume under higher stock position. The source sees the makers purchased at lower price for spot purchases but the makers officially reduced the price just after the announcement by Tokyo Steel.

Ferrous scrap market price continued decreasing around Osaka. Local electric furnaces’ purchase price is 31,000-31,500 yen per tonne for H2 grade and some makers pay around 32,000 yen. Local electric furnaces reduced the price in Osaka and Himeji on Saturday when Tokyo Steel reduced the price.

The local electric furnaces reduced the price by 500 yen per tonne on Saturday and some makers reduced the price by 1,000 yen for higher grade scrap. Local integrated steels’ scrap purchase slowed in western Japan. One dealer source sees the pressure for the price reduction by local electric furnaces is much higher than the makers in Tokyo.