Electric Furnaces’ Ferrous Scrap Buy Price Rebounds, Japan

Ferrous scrap market price rebounds in Japan. Japanese electric furnace steel makers are raising their purchasing prices when Chinese, South Korean and Taiwanese steel makers restarted procurement of Japanese ferrous scrap. The market price rebounded for the first time in one and a half months around Tokyo. The current export price is around FOB US$ 22,000 yen per tonne for H2 grade to East Asia. The export price is reaching CFR US$ 280 per tonne to Taiwan.

Japanese electric furnaces are purchasing ferrous scrap at 17,000-18,000 yen per tonne. The price surged by 2,000 yen around Tokyo. Most makers raised the purchase price by 2,000 yen on Saturday. Some pay as high as around 19,000 yen per tonne.

The demand for ferrous scrap is decreasing when electric furnaces are reducing their output from autumn. Meanwhile, scrap generation is decreasing and the export is increasing. A scrap dealer source said the supply and demand balance may affect domestic makers’ purchasing volume.

Ferrous scrap market price hit the bottom around Osaka when the export is increasing from Osaka bay. Ferrous scrap export price is 4,000-5,000 yen per tonne to East Asia, higher than the domestic furnaces’ purchase price. Local electric furnaces are purchasing scrap at around 14,500-15,500 yen per tonne.

Tokyo Steel Manufacturing raised the purchase price from Saturday, but other electric furnaces didn’t follow the hike. Electric furnaces around Osaka are forced to reduce their output by over 50% in January from a year earlier. They seem to continue the output cut for a while. Ferrous scrap market price is prospected to take a long time to rise due to the demand recession.