Japan Ferrous Scrap Price Rebounds

Japanese ferrous scrap price rebounded for the first time in one and half months around Tokyo and Osaka when the export recovers under low level scrap generation. However, the dealers concern the price couldn’t recover steadily under decreasing steel price for construction and slow steel demand.

The scrap export price is FOB 23,300-24,000 yen per tonne for H2 grade, which is slightly higher than last week level. The export transaction increases when Chinese buyers resume the purchase from Japan along with orders from South Korean buyers.

Tokyo Steel Manufacturing’s Utsunomiya plant and other makers around Tokyo increased the scrap purchase price by 1,000-2,500 yen to 23,000-24,000 yen per tonne for H2 grade last week. The dealers expect the scrap supply could get tighter when the dealers’ purchase volume is still low level.

Electric furnace steel makers pay 23,500-25,500 yen per tonne for H2 grade scrap around Osaka. Two electric furnace steel makers in Himeji, Hyogo increased the purchase price after Tokyo Steel raised the purchase price by 1,500-2,500 yen last week. Steel makers around Osaka also increased the purchase price by 500-1,000 yen after local scrap dealers’ joint export tender. The dealers expect other steel makers would increase the purchase price to secure scrap.

The scrap shipment to local steel makers could decrease when the exporters will ship for existing orders and the market expects higher price. The scrap supply is likely to get tighter mainly for heavy grade while local electric furnace steel makers keep wide production cut.