Slight Rebound of Ferrous Scrap Price in Tokyo, Osaka

Ferrous scrap purchase price by electric furnace steel makers rebounded by 1,000-2,000 yen per tonne in Tokyo and Osaka for the first time in 2 months. The price is lifted when scrap export transaction resumes. However, the price is still uncertain whether the price would keep increasing when domestic steel makers expand output reduction.

Scrap buyers in China and South Korea restart the inquiry for Japanese scrap while they were reluctant to buy for months. The scrap export price is around FOB 13,000-14,000 yen per tonne, which is 3,000 yen higher than the level at beginning of November. The international export talk is in range of C&F US$ 220 per tonne for Turkey while the export price increases from USA.

Some electric furnace steel makers around Tokyo increased the purchase price to 9,000-11,000 yen per tonne for H2 grade in the week. The price increase is still slight but the industry interests see the price hit bottom. The makers increase the purchase volume under low level scrap supply from the market while the makers had reduced the purchase volume under production cut.

Electric furnace steel makers around Osaka increased the scrap purchase price in the week to 9,000-10,500 yen per tonne for H2. The supply balance gets improving due to lower supply volume from the market while the demand also decreases under steel makers’ additional cut of production. The lower supply is partly due to very low scrap price when some scrap suppliers are forced to pay for scrap supply. However, a dealer source said the price increase is just adjustment of too low price and the market couldn’t recover significantly.