Ferrous Scrap Price Drops by 3,000 yen/t in Tokyo

Ferrous scrap purchase price by local electric furnaces decreased by 3,000 yen per tonne for H2 on Friday around Tokyo. The price is 26,500-28,000 yen and some pay as high as 29,000 yen. The price decreased by total 15,000 yen per tonne compared with the recent highest at the end of September.

Ferrous scrap export keeps slow from Japan. South Korean electric furnace steel makers have ferrous scrap at several hundreds thousands tonnes and makers’ buying interest is low. Ferrous scrap inventories at dealers’ warehouses or bays are flowing to Japanese electric furnaces. A dealer source said dealers’ sales destination is getting less when most electric furnaces limit or stop the ferrous scrap reception.

Utsunomiya works of Tokyo Steel Manufacturing decreased the purchase price of ferrous scrap to 29,000 yen per tonne for H2 on Friday, which fell below 30,000 yen per tonne for the first time in about 2 years. Other electric furnaces decreased the price by 3,000-5,000 yen. The makers’ purchase price also decreased around Osaka on Friday, which decreased by 20,000 yen to 27,000-28,000 yen per tonne from the begging of October.

Some makers decreased the purchase price by 5,000 yen per tonne. A dealer source said the ferrous scrap market price trend is uncertain. Japanese ferrous scrap market price dropped rapidly from late July while rose in September. But the price decreased in October.

The market price around Osaka hit the lowest since December 2006, which decreased by 45,500 yen per tonne from the yearly peak. The supply and demand balance is loose when the export contracts turn flat for East Asia. The demand for steel products is going from bad to worse. A large dealer source said electric furnace steel makers may more decrease the output after November.