Japan Ferrous Scrap Market Price Enters Adjustment Phase

Japanese ferrous scrap market price is entering adjustment phase. Some of electric furnace steel makers around Tokyo are moving to purchasing price cut. In Osaka area, local scrap market price declined for the first time in four and a half months. A trader source points out scrap delivery currently increased at electric furnaces. Meanwhile, several scrap dealers consider this is temporary price down, referring to several positive factors to push up scrap market price in and after April, including raw steel material cost up such for iron ore at integrated steel makers.

Electric furnace steel makers around Tokyo purchase H2 grade at 39,000-40,000 yen per tonne and some pay as high as 40,500 yen as of March 1. The price surged by 1,000-1,500 yen from previous week. Meanwhile, some of scrap exporters around Tokyo Bay lowered their purchasing price due to weak export market price and slow export shipment.

Some of electric furnaces are adjusting scrap purchasing price slightly downward or decreasing procurement volume since scrap delivery increased at the end of last week. However, a local scrap dealer source says regional supply and demand balance maintains totally tight and it is uncertain whether the market price declines more.

Electric furnaces around Osaka purchase H2 grade at 40,000-41,000 yen. Kishiwada Steel, Godo Steel, Shin Kansai Steel and Nakayama Steel Products lowered their scrap purchasing price by 1,000 yen on Tuesday. Osaka Steel decreased its purchasing price for ferrous turning scrap by 1,000 yen.

Electric furnaces around Osaka reduced the purchasing price for the first time since October 2010. A trader source analyzes every steel maker secured scrap inventory for immediate consumption while scrap generation is slightly increasing from small size building demolitions.