Ferrous Scrap Market Price to Drop under Loose Supply

Ferrous scrap market price is weak to reflect loose supply around Tokyo and around Osaka. The market price is around 22,500 yen per tonne for H2 grade, 24,300 yen for H1 grade and 26,000 yen for HS grade at the dealers’ purchase price including freight around Tokyo. Local electric furnace steel makers pay 31,000-32,000 yen for H2 grade. Around Osaka, the market price is weak at 21,500 yen for H2 grade. Local electric furnaces pay 31,500-32,500 yen for H2 grade.

Supply and demand balance is easy around Tokyo. Scrap export market price is also leveling off for East Asia though the shipment is steady from Tokyo Bay for order backlog. One trader source said South Korean importers are cautious on new contracts at high price, watching currency exchange rate.

Electric furnace steel makers around Osaka reduced the scrap purchasing prices at the weekend or this week when Tokyo Steel Manufacturing reduced scrap purchasing price on Friday. Osaka Steel, Kishiwada Steel and Nakayama Steel Products reduced the purchasing prices by 500 yen on Tuesday. Steel makers implemented the price cut for two weeks in a row.

One scrap dealer in Osaka suggested scrap delivery is smooth to steel makers and most local electric furnaces seem to have finished inventory building for Japanese long holidays from late April to early May.