Ferrous Scrap Price Drops in Tokyo

Ferrous scrap market price keeps decreasing around Tokyo when local electric furnace steel makers’ scrap purchase price decreased by 1,000 yen to 17,000-19,000 yen per tonne for H2 grade on Wednesday. The supply balance gets easier when local makers’ consumption decreases under major production cut while market leaded export is slump recently.

The local makers’ scrap purchase price decreased by 3,000-3,500 yen per tonne from February level. Most of the makers limit the scrap acceptance under the production cut. Tokyo Steel Manufacturing reduced the scrap purchase price by 1,000 yen to 19,000 yen per tonne for H2 grade on Wednesday and other makers followed the move.

The dealers’ sales route narrows due to lower steel makers purchase and lower export volume. Local scrap supply is still low level. However, a dealer source said their sales condition is getting worse due to limited demand at home and abroad.

Scrap export price is FAS 17,000-17,500 yen per tonne for H2 grade from Tokyo bay, which is still lower than local steel makers’ purchase price. Some exporters limit the scrap acceptance when the new export transaction is slump due to less appetite from steel makers in China and South Korea. A trading firm source said offshore makers’ appetite apparently gets lower while they keep inquiring for potential import of Japanese scrap.

Ferrous scrap market price is decreasing around Osaka. As Tokyo Steel, Kishiwada Steel reduced the scrap purchase price by 500 yen per tonne for all grades except for steel turning scrap and Yamato Steel reduced the price by 1,000 yen on Wednesday. The averaged purchase price by local makers is 17,000-19,000 yen. Yamato Steel’s purchase price is 17,500 yen for H2 with additional 500 yen incentive for scrap from other prefectures.

Scrap consumption decreases around Osaka under wider production cut than the drop around Tokyo. Steel makers in Hyogo except for Yamato Steel stop the scrap acceptance.