JFE Steel to Start Ferrous Scrap Purchase at Chiba of East Japan Works

JFE Steel starts ferrous scrap purchase from the market at Chiba area of East Japan works in April, according to scrap dealer sources. The works purchases monthly 20,000-30,000 tonnes of scrap mainly for HS grade. The firm apparently tries to increase the output with the scrap to meet higher demand for export. Such purchase by integrated steel makers could impact on domestic scrap supply and price while Japanese scrap export transaction is slow recently.

With Chiba area, JFE Steel purchases all works including Keihin area of East Japan works and Fukuyama and Kurashiki area of West Japan works. The firm has limited additional production capacity when the firm stops no.3 blast furnace at Fukuyama for a year while the firm restarted no.3 blast furnace at Kurashiki in February after one year idle.

Domestic integrated steel makers increase the scrap purchase since JFE Steel restarted the purchase at Kurashiki in June 2009. The integrated steels’ scrap consumption reaches near peak at more than 14% of the converter steel output in recent months while domestic electric furnace steel makers keep major production cut.

Domestic scrap market price keeps increasing since the beginning of the year partly due to higher purchase by domestic integrated steel makers, according to the dealer sources. JFE Steel’s additional purchase could lift domestic consumption when international scrap market price is lifted by higher raw steel output and higher raw materials cost worldwide.