Japan Ferrous Scrap Price in Firm Tone

Japanese ferrous scrap market price is firm to reflect export recovery to East Asia. The current export contract price surged by 2,000-3,000 yen to FOB 25,000 yen per tonne for H2 grade compared with October. Domestic demand for ferrous scrap is low due to Japanese electric furnace steel makers’ output reductions. Meanwhile, domestic scrap market price is stable when Japanese integrated steel makers are increasing scrap procurement.

Domestic electric furnaces purchase H2 at 24,000-25,000 yen around Tokyo and some pay as high as 25,500 yen. Their purchasing volume stays low yet. A dealer source said the market price is unexpected to drop since scrap supply and demand balance is tight thanks to remained export contracts.

Around Osaka, local electric furnaces purchase H2 at 24,500-26,000 yen. They continue spot purchase due to dealers’ low shipment. Some electric furnace steel makers widened output reduction rate in November. Kishiwada Steel, a major electric furnace steel maker around Osaka, plans to suspend operation temporarily from the end of November.

Consequently, dealers expect electric furnaces’ purchase price doesn’t rise soon and the market price may get into adjustment phase.