Japan Ferrous Scrap Price Hits Ceiling

Japanese ferrous scrap market price seems to hit the ceiling when the export price peaked out. The export price levels off at 22,000-23,000 yen per tonne for H2 since last week. Active scrap export is expected to continue for a while with exporters’ order backlogs. Domestic scrap supply and demand are balanced. It is unforeseeable whether the price turns downward.

The export price was FOB 24,000-24,500 yen per tonne for H2 in mid May. Overseas importers currently lowered the offer price to around FOB 23,000 yen. Because the export price hit the ceiling, domestic ferrous scrap market price stopped rising. Electric furnace steel makers around Tokyo purchase H2 at 22,000-23,000 yen.

Domestic scrap consumption keeps low due to steel makers’ low operation. However, a dealer source said the supply and demand could keep the balance when export shipping continues for a while and scrap generation is low.

In Osaka, electric furnaces purchase H2 at 21,000-22,500 yen per tonne and some pay as high as 23,000 yen. The price keeps flat from last week. Tokyo Steel Manufacturing raised the purchase price by 500 yen but other makers set the price unchanged in the region.

Ferrous scrap export volume has increased from Osaka Bay to East Asia since last year due to domestic demand decline. However, the export price recently hit the ceiling. To follow the trend, domestic market calmed down.

Export bid tender price is expected to drop in July. Meanwhile, a large dealer source forecasts the export price is unlikely to decrease largely.