Japan Ferrous Scrap Supply to Keep Tight

Japanese ferrous scrap supply is expected to keep tight for October-March period. The demand is strong at home and abroad while the supply is slower. The supply around Tokyo diverted to local electric furnace steel makers while the export was slow since September. The supply has little chance to get easier when domestic integrated steel makers and special steel makers plan output increase. Japanese scrap consumption hit record 51.348 million tonnes in fiscal 2006 ending March 2007. The export increased by 0.4% to record 7.537 million tonnes when offshore buyers increased the purchases. The scrap export is slow while offshore buyers try to keep purchasing Japanese scrap. Hyundai Steel of South Korea holds weekly tender for Japanese scrap. Japanese integrated steels try to increase the scrap purchase from the market to increase the output and to reduce carbon dioxide emission. Nippon Steel will increase the purchase at Oita after the introduction of domestic largest shredder plant. JFE Steel builds new shaft furnace with 500,000 tonnes of annual melting capacity at East Japan works while the firm plans to purchase monthly 20,000 tonnes of steel at West Japan works.