Ferrous Scrap Price Nears Bottom in Tokyo, Osaka

Ferrous scrap market price shows sign to hit bottom in Tokyo and Osaka when electric furnace steel makers pay around 8,000-10,000 yen per tonne for H2 The mood is improving when the supply balance gets improving due to resuming export transactions and lower supply under very low level price. The price is likely to find the bottom while the price is expected not to rebound significantly when domestic steel makers expand output reduction.

Chinese and South Korean buyers started purchase of Japanese scrap after around 60,000 yen per tonne price down from the peak in July. The export price is FOB 12,000-13,000 yen per tonne for H2 for Southeast Asia.

Electric furnace steel makers around Tokyo pay 8,000-11,000 yen per tonne for H2. The makers keep high level scrap inventory. However, the scrap dealers get lower level scrap supply from the market due to very low pricing.

Electric furnace steel makers around Osaka reduced the scrap purchase price by around 36,000 yen per tonne for H2 since beginning of October. However, the market players started to expect the price is near bottom despite of makers’ output reduction when scrap supply decreases.

Tokyo Steel Manufacturing reduced the scrap purchase price by 1,000-2,000 yen per tonne on Wednesday but makers around Osaka didn’t follow the move. Some dealers started to build scrap inventory with expectation for higher price.