Japan Ferrous Scrap Composite Price Increases for 2 Straight Weeks

Japan Steel Scrap Composite Price, which is an averaged purchase price of scrap dealers in Tokyo, Osaka and Nagoya, continued to increase for 2 weeks in a row through last week. The price increased by 1,200 yen to 28,600 yen per tonne for H2 grade and to 32,000 yen for cutting press last week from the previous week. The price represents US$ 340.27 and US$ 380.73 per tonne respectively based on 84.05 yen per US dollar of telegraphic transfer selling rate.

The dealers pay around 31,000 yen per tonne for H2 grade scrap around Tokyo last week, which is 500-1,000 yen higher than the level in the beginning of January. Electric furnace steel makers’ purchase price is 36,500-37,500 yen for H2 grade while some makers pay around 38,000 yen on Monday.

Many electric furnaces around Tokyo increased ferrous scrap purchase price from 2 weeks ago to first half of last week. However, the electric furnaces kept the price unchanged in second half of last week. The dealers followed purchase price hike by electric furnaces. However, the scrap supply to the dealers remains tight.

The dealers pay 24,300 yen per tone for H2 grade scrap around Nagoya last week. The electric furnaces’ purchase price is 37,000 yen for H2 grade and 39,500-40,000 yen for new cutting scrap last week. The local electric furnaces and integrated steel makers increased the purchase price. All local makers increased the purchase price twice in January.

The dealers see the steel makers around Nagoya increased the scrap purchase price to narrow the price gap between Tokyo and Osaka while the scrap export offer price to South Korea turned downward. The export transaction would be thin before the end of Chinese New Year when the exporters receive few inquiries from overseas steel makers including Hyundai Steel, according to trading firm source. The market price would be flat while the supply to local steel makers increases due to higher makers’ purchase price.

The dealers pay around 30,500 per tonne for H2 grade scrap around Osaka last week. The dealers see integrated steels would increase the purchase of high grade scrap including HS grade when iron ore and metallurgical coal price are expected to increase.

The overseas market price stopped increasing while electric furnaces around Osaka increased scrap purchase price to 38,000-39,000 yen per tonne in January. The domestic market price would level off, according to trading firm source.