Japan Ferrous Scrap Price Drops Again

Japanese ferrous scrap price turned into decrease for the first time in near one month under slump for new export transaction to East Asia. The domestic consumption decreases in July from June when many electric furnace steel makers plan summer time maintenance outage. Domestic integrated steel makers could reduce the consumption for potential production cut. However, some scrap dealers expect the scrap market could be supported low level dealers’ stock and scrap generation level.

Japanese scrap export decreased year to year for 3 months in a row through May. The export to China decreased for 7 months in a row. A trading firm source said the export price decreased more than domestic market and the many export negotiations failed when FAS shipping price increased from Tokyo bay with higher demand from Osaka and western Japan.

Electric furnace steel makers pay 28,500-30,000 yen per tonne for H2 scrap around Tokyo. Tokyo Steel Manufacturing and other makers reduced the purchase price on Friday. The scrap export order backlog around Tokyo decreases with limited new order. A scrap dealer expects additional makers’ scrap purchase price cut while other dealer sees the low level scrap supply support the market.

Electric furnace steel makers pay 29,000-30,500 yen per tonne for H2 around Osaka, which is around 1,000 yen lower than previous week. Osaka Steel reduced the purchase price on Wednesday and other makers followed the move by Friday. A trading firm source said the scrap price could decrease more when the makers reduce the production more than planned.