Ferrous Scrap Price to Hit Bottom in Tokyo

Ferrous scrap market price shows sign to hit bottom in Tokyo and Osaka. Offshore makers restarted the scrap purchase since end of August when the Japanese price is reasonable after more than 30,000 yen drop from early July. Japanese exporters start to talk with offshore buyers even at higher price than domestic market mainly for new cutting grade. Some dealers expect the price would hit bottom sooner when local electric furnace steel makers are finishing the maintenance outage period. Local electric furnaces pay 36,500-40,000 yen per tonne for H2 around Tokyo. Hyundai Steel of South Korea recently restarted the purchase of Japanese scrap while the firm avoided high priced Japanese scrap before. Japanese export price from Tokyo bay is higher than local market. Local scrap demand is recovering the normal level in the month when many local makers resumed the normal level operation after maintenance outage by August. The demand could improve when scrap exporters around Tokyo bay started to build scrap inventory preparing for potential higher export. Hyundai Steel reduced offer to Japanese scrap in the week. The price level is apparently FOB 39,500 yen per tonne for H2 grade, which is 1,500 yen lower than previous week but still higher than local makers’ purchase price. Ferrous scrap price is also hitting bottom in Osaka. Local electric furnace steel makers pay 40,000-41,000 yen per tonne for H2 grade. The market players started to find the bottom level as Tokyo. However, some dealers see the market could take time to rebound when integrated steel makers have sufficient scrap inventory.