Japan Ferrous Scrap Price Falls below 20,000 y/t

Ferrous scrap purchase price by electric furnace steel makers fell below 20,000 yen per tonne for H2 grade last week. The price hit the lowest in recent 3 years around Tokyo, Nagoya and Osaka. The demand for ferrous scrap is decreasing when the ferrous scrap export is decreasing for East Asia. Electric furnaces sharpen the stance toward output reduction.

South Korean electric furnace steel makers stopped the purchase of ferrous scrap from Japan and USA due to deterioration in economic conditions. Ferrous scrap composite price in USA decreased to US$ 189.17 or 18,900 yen per tonne. A dealer source said ferrous scrap market price in Japan could keep below 20,000 yen per tonne.

Ferrous scrap market price by electric furnaces around Tokyo decreased by 2,000 yen per tonne for H2 grade on Friday and fell below 20,000 yen. The purchase price is 19,000-20,000 yen per tonne and some pay as high as 22,000 yen. Utsunomiya works of Tokyo Steel Manufacturing cut the purchase price by 7,000 yen per tonne for 15-17 October. Other makers reduced the purchase price following Tokyo Steel Manufacturing.

The purchase price by electric furnaces around Osaka fell below 20,000 yen to 19,000-20,000 yen, too. The price decreased by 27,500 yen or 59% from the beginning of this month. Since August 2005, the price fell below 20,000 yen.

A large dealer source said the demand for steel products can’t recover, even if the makers reduce the selling price by 10,000-20,000 yen per tonne, and it is hard the demand for ferrous scrap recovers in near future.