Japan Ferrous Scrap Price to Decline

Ferrous scrap demand is rapidly decreasing around Tokyo when local electric furnace steel makers cannot operate normally due to controlled blackout program. Under the lower consumption, the makers reduce the scrap purchase volume. The scrap exporters also have stopped scrap export from Tokyo bay. The dealers expect the supply balance keeps more than the demand when radiation pollution issue also impacts on the shipment to other areas and offshore countries. Electric furnace steel makers are reducing scrap purchase price around Osaka when the scrap supply is increasing while the price was around 2,000 yen per tonne higher than the level around Tokyo.

Local electric furnace steel makers’ ferrous scrap purchase price is 35,000-37,000 yen per tonne for H2 grade. The dealers increase the scrap shipment when they can get enough gasoline for the transport. The shipment focuses on local makers, which offer higher price than FAS shipping price from Tokyo bay, while most of local steel makers reduce the purchase volume.

Electric furnaces around Osaka reduced the scrap purchase price by 500-1,000 yen per tonne to 37,000-38,500 yen for H2 grade on Wednesday. Loosening scrap supply pressures on the price when local manufactures try to liquidate scrap inventory during the fiscal year to March end. The electric furnaces would increase the scrap purchase before Japanese long holidays from end of April to early May. However, many dealers see electric furnaces could reduce the purchase price more in this month.