Japan Major Steels to Expand Ferrous Scrap Purchase

Japanese integrated steel makers would increase the ferrous scrap purchase from the market in and after October. JFE Steel already increases the purchase at West Japan works in September to the level of peak in 2008 and starts shaft furnace at East Japan works in and after October. Nippon Steel restarted the purchase at Nagoya works and plans to increase the purchase at Oita works in October. The higher purchase by the major makers would impact on the domestic market when the scrap generation could keep low level while electric furnace steel makers reduce the consumption and scrap export to East Asia is slow.

Nippon Steel and JFE Steel still idle some of the blast furnaces while Japanese major steel makers increase the raw steel output from the bottom. The makers increase the scrap purchase from domestic market as the lowest cost material for production increase. Domestic scrap consumption by converter reached more than 14% in July, which is same level as the peak in 2008 and much higher than the bottom of 9.5% in January 2009.

Nippon Steel restarted the scrap purchase from the market at Nagoya works in July and increases the purchase volume to 35,000 tonnes in September, according to industry sources. The firm purchases around 60,000 tonnes of scrap at Oita works compared with 40,000 tonnes in August after the commissioning of relined no.1 blast furnace. The purchase volume would increase to 100,000 tonnes in October to increase the production.

JFE Steel, which restarted the scrap purchase from the market in June, plans to restart shaft furnace at East Japan works for more production when the shipment increases mainly for export. The firm is expected to purchase as much as 120,000 tonnes for East and West Japan works after restart of shaft furnace while the scrap purchase is around 40,000 tonnes at East Japan works now.