Ferrous Scrap Price Rises around Tokyo and Osaka

Ferrous scrap market price increased in Tokyo and Osaka areas when the export price rose to South Korea. The market price upturned for the first time since December around Tokyo while surged for two weeks in a row around Osaka. Electric furnace steel makers pay around 30,000 yen per tonne for H2 grade. New export contracts are negotiated at around FOB 32,000 yen per tonne. One scrap dealer source said the market price would maintain strong since scrap supply is tightening mainly for H2 grade due to steady export shipment in Tokyo and Osaka.

Around Tokyo, local electric furnaces purchase H2 at 29,500-30,500 yen and some pay as high as 31,000 yen. Utsunomiya works of Tokyo Steel, Japanese largest electric furnace steel maker, raised the purchase price by 500 yen on Tuesday. This is the first price hike since December 16. Other steel makers followed the price hike by 500-1,000 yen.

Ferrous scrap export is active from Tokyo Bay to South Korea. Shippers show strong appetite for scrap procurement. Shippers’ purchase price increased by 500 yen to FAS 29,500-30,000 yen from last week. One large dealer pointed out local steel makers are pulling up their purchase prices along the export price upsurge. Local steel makers around Tokyo keep scrap procurement volume unchanged. Another scrap dealer said the supply and demand balance would tighten if ferrous scrap export maintains steady.

Around Osaka, local electric furnaces purchase price H2 at 29,500-30,500 yen and some pay as high as 31,000 yen. Okayama works of Tokyo Steel leaves the purchase price unchanged. Then electric furnaces in Himeji area passed the price hike. Meanwhile, in Osak area, several electric furnaces raised the purchase price on Tuesday. A local scrap dealer said the supply is tight mainly for normal grade ferrous scrap such as H2 due to low purchase volume by Japanese integrated steel makers while the supply is relatively easy for higher grade scrap such as HS.