Higher Ferrous Scrap Price in Tokyo, Osaka

Ferrous scrap market price kept increasing around Tokyo in June. The purchase price by local electric furnace steel makers increased by 5,000 yen per tonne in the month under tight supply. The price is expected to keep firm when the supply keeps tight despite of the lower output plan by local steel makers. The makers pay 69,500-71,500 yen per tonne for H2 grade around Tokyo. The supply is tight due to higher purchase by integrated steel makers while electric furnaces plan seasonal lower operations. The dealers’ sources expect the price could keep the high level. The price level around Osaka increased by 5,000-6,000 yen per tonne in June pressuring on steel makers’ cost. The price turned into increase with purchase price hike by Tokyo Steel Manufacturing in June after temporally peak in May. The electric furnaces pay 70,000-71,000 yen per tonne for H2 grade, which increased by 6,250 yen from the beginning of June. The makers try to pass higher cost for ferrous scrap and other factors on the selling price of the products. However, the market is uncertain due to slower building activity especially for condominium. Some electric furnaces try to take chance in booming offshore market by exporting billet and steel products. However, the relative high level operation for the domestic demand keeps the scrap supply tight. The makers try to secure the material by raising the purchase price.