Japan Ferrous Scrap Price Hits 5-Year Low

Ferrous scrap purchase price by electric furnace steel makers declined by 2,000-2,500 yen in late last week around Tokyo and Osaka due to slower demand under output reduction by local makers and export shipment slump. The purchase price declined to less than 15,000 per tonne for H2 grade, which was the lowest level in around 5 years.

Tokyo Steel Manufacturing reduced the scrap purchase price by 1,000 yen to 16,500 yen per tonne for H2 at Utsunomiya plant. Other makers followed the move reducing to purchase price to 13,500-14,500 yen per tonne for H2 around Tokyo.

Electric furnace steel makers around Osaka also reduced the purchase price by 2,000-2,500 yen to 14,000-15,000 yen per tonne for H2 on Friday. Yamato Steel, which leads scrap pricing in Himeji area, reduced the purchase price to 17,000. The scrap purchase price dropped by around 32,250 yen or 69% in Osaka and by around 29,000 yen or 63% in Himeji from the beginning of the month.

Electric furnaces reduced the purchase price of scrap by 1,000-1,500 yen per tonne in late last week around Nagoya, Sendai and Toyama.

The scrap price is expected to decrease more under slower economy. Some dealer sources expect lower grade market price could be negative, under which scrap supplier should pay for scrap sales to the dealers.