Ferrous Scrap Hits Bottom in Tokyo

Ferrous scrap market price is hitting the bottom with sign to rebound in offshore market after the decrease. Local electric furnace steel makers pay 32,500-33,500 yen per tonne and some pay as high as 34,000 yen. Some scrap dealers started to build inventory preparing for recovery. Scrap export shipping from Tokyo bay was slow since late April with slower demand from offshore buyers. Local scrap dealers try to ship scrap to local electric furnace steels with expectation of lower price. Local steel makers get smooth scrap arrival even around a-week long holiday in early May. However, the offshore market shows sign to recover. Hyundai Steel and POSCO of South Korea, which is major scrap consuming country, increased the scrap purchase price from domestic suppliers in end of May. Some Japanese interests expect the export price could rebound when buyers in Turkey restarted the aggressive scrap purchase though the international indicator of US scrap composite price has kept flat since May. Japanese dealers see the better offshore market could impact on domestic market. Local electric furnace steels’ scrap purchase price is 3,000-3,500 yen per tonne lower than recent peak in April. The makers keep the purchase price in the month after the reduction by May and the purchase price is meeting to FAS scrap shipping price from Tokyo bay. Some scrap shippers around Tokyo started to build inventory preparing for potential export demand.