Ferrous Scrap Price Hits First 20,000 yen/T in 3 Months in Tokyo

Ferrous scrap purchase price by electric furnace steel makers increased to more than 20,000 yen per tonne for H2 grade around Tokyo for the first time in about 3 months when the electric furnaces raised the purchasing price to encourage the dealers’ shipment instead of higher priced export shipping. Some electric furnaces around Osaka increased the purchase volume despite of the more than 50% production cut from a year earlier after they limited the volume since end 2008. They try to secure the scrap while the dealers reduce the shipment to build inventory.

Electric furnace steel makers around Tokyo pay 20,000-22,000 yen per tonne for H2 grade scrap. The dealers tend to ship more scrap for export shipping when the export price is 1,000-2,000 yen higher than electric furnaces’ purchase price.

Tokyo Steel Manufacturing raised the purchasing price by 1,000 yen per tonne at Utsunomiya plant on Wednesday and other makers followed the purchase price increase. The market price increased by 5,000 yen per tonne around Tokyo compared with the beginning of January.

The market price is increasing gradually around Osaka. The purchase price by electric furnaces is around 17,500-19,000 yen per tonne for H2 grade. Some contract price is still low at around 15,000 yen but some electric furnaces raised the purchasing price for the second straight month. In Himeji area, Yamato Kogyo Steel raised the purchasing price to 20,500 yen.

Some dealers secure the scrap at higher price for export around Osaka as around Tokyo. The scrap supply is decreasing when the some dealers secure the inventory preparing for committed export shipping at the end of month while the scrap supply decreases from the market.