Japan Fe Scrap Consumption Forecasted to Decrease by 1.5% in Oct-Dec

Demand for Japanese ferrous scrap is forecasted to decline in October-December. The demand maintains stable from domestic electric furnace steel makers while weak from integrated steel makers and offshore users. Japan Metal Bulletin estimates Japanese domestic ferrous scrap consumption decreases by 1.5% in October-December from the previous quarter.

Japanese crude steel shipment is forecasted to decrease by 1.5% to 26.98 million tonnes in October-December from the previous quarter, according to Ministry of Economy, Trade & Industry. In fiscal 2009 ended in March 2010, ferrous scrap utilization in Japanese crude steel production was 31.5% and the yield for steel source input was 91.3%, according to Japan Ferrous Raw Materials Association.

Based on these figures, Japanese ferrous scrap consumption is estimated at approximately 9.308 million tonnes for October-December, decreasing by 1.5% quarter-on-quarter and by 12% year-on-year.

Japanese electric furnace steel makers keep stable productions even though the output level is not high. Meanwhile, integrated steels’ ferrous scrap procurement from the market is recently decreasing along their output reductions and there is no sign to recover in a short term, said Japanese trader source. The demand is especially decreasing for high grade scrap such as new cutting and HS.

Japanese ferrous scrap export is also slow. Offshore demand isn’t weak but the export market is impacted by strong yen rate and weak Japanese scrap price. South Korean steel makers are offering Japanese ferrous scrap but the offer prices are cheaper than Japanese electric furnace steels’ purchasing price.