Higher Ferrous Scrap Price in Osaka

Electric furnace steel makers’ ferrous scrap purchase price increased by around 1,500 yen per tonne or 2% in the week around Osaka. The price is likely to keep increasing when integrated steel makers increase the consumption while electric furnace steel makers plan summer time outage in July. The electric furnace steels’ purchase price is 67,500-69,000 yen per tonne for H2 grade, which is around 27,000 yen or 65% higher than the level at the beginning of the year. Local makers increase the purchase price under tight supply. The electric furnaces usually reduce the operation in July due to higher electricity cost. However, the scrap supply also decreases in summer time due to lower activity by the manufacturers. The scrap industry interests expect the makers cannot build scrap inventory under tight supply despite of the lower consumption. Domestic integrated steel makers’ higher consumption impacts the tight scrap supply along with higher export. Osaka market, which depends part of scrap supply from other areas, experiences tighter supply due to lower supply from other areas when price level in each area is leveling recently in Japan.