Japan Ferrous Scrap Consumption to Decrease by 4.3% for Jul-Sep

Japanese ferrous scrap consumption is estimated at approximately 9.88 million tonnes for July-September, decreasing by 4.3% from April-June while increasing by 2.3% from the corresponding period of a year earlier. Domestic crude steel demand is forecasted to decreases by 4.3% to 26.82 million tonnes for July-September from the previous quarter, according to Ministry of Economic, Trade & Industry. Ferrous scrap utilization in Japanese crude steel production was 33.6% in fiscal 2008 ended in March 2009, according to Japan Ferrous Raw Materials Association. Scrap consumption is calculated with these figures.

Crude steel output by electric furnace carbon steel makers levels off under low operating rates. Several makers will temporarily suspend electric furnaces during summer holidays. One scrap dealer said integrated steel makers may decrease scrap procurement in or after August.

Japanese ferrous scrap export maintains inactive to East Asia. Chinese and Taiwanese steel makers were said to restart purchase of Japanese ferrous scrap in late June but the contract volume seemed relatively small.

Scrap arrivals are slow at dealers’ sites with stagnant scrap generation in Japanese market. In addition, most dealers accelerated scrap shipment from mid May to early June when ferrous scrap market price dropped. Dealers’ inventory seems at the low level. Domestic supply and demand balance of ferrous scrap would keep balanced for July-September.