Ferrous Scrap Price Hits 70,000 yen/t in Osaka

Ferrous scrap market price reached 70,000 yen per tonne for H2 grade around Osaka at electric furnace steel makers’ purchase price. The makers increased the price by 1,000 yen to secure materials under tight supply after 1,000-2,000 yen increase last week. The purchase price level is 68,500-70,000 yen per tonne for H2 grade, which is around 5,000 yen or 8% higher than early June. The steel makers should follow the higher price under tight supply, a dealer source said. The makers try to export billet to meet strong demand from offshore buyers when the domestic demand is slow for concrete reinforcing steel bar due to slowing condominium sales. The relative higher output by electric furnaces supports the higher ferrous scrap market. Electric furnace steel makers try to build inventory for operation during mid-summer holiday while their output in July is usually lower than June and the scrap generation gets lower in summer. The supply balance is expected to be tighter due to higher purchase by integrated steel makers than last year. Ferrous scrap market price is 68,000-69,500 yen per tonne for H2 grade around Tokyo, which is approaching to 70,000 yen level due to strong demand from integrated steel makers. Local electric furnaces try to secure the materials by lifting the price in competition with rising FAS price from Tokyo bay. Tokyo Steel Manufacturing’s Utsunomiya plant and some other makers increased the purchase price by 1,000 yen per tonne last week around Tokyo. The price is expected to keep the level under tight local supply.