Japan Ferrous Scrap Supply to Keep Balanced in July-September

Japanese ferrous scrap supply is expected to keep balanced in July-September. The demand is likely to keep low when the main users of electric furnaces carbon steel makers keep low level production. However, the supply balance is expected to keep balanced when scrap generation is low level and offshore buyers’ appetite keeps firm for Japanese scrap.

Japanese steel makers keep low level production since late 2008 under slow demand. The scrap demand is lower in July-September than same period of 2008, when the demand was 13.566 million tonnes, according to Japan Ferrous Raw Materials Association.

The consumption by electric furnace carbon steel makers has kept lower than a year earlier level since late 2008. The consumption increases gradually since February but the demand in July-September is likely to same level as April-June due to planned maintenance outage in summer, according to distributors.

Japanese integrated steel makers restarted the scrap purchase from the market despite of the limited volume. The purchase supports the balanced supply under very slow demand condition.

The scrap generation is still very low level when construction and manufacturing activity is very slow. The dealers expect the generation is likely to keep low level in foreseeable future.

Offshore scrap buyers appetite is still firm for Japanese scrap. Japanese exporters will ship scrap for existing orders until mid-August. The offshore demand contributes to balanced supply in Japan despite of the slow domestic demand.