Ferrous Scrap Price Steps to 40,000 yen/t in Osaka

Ferrous scrap price rises toward 40,000 yen per tonne for H2 grade around Osaka when local electric furnace steel makers try to secure materials to build inventory for a-week long holiday. They pay 38,500-39,500 yen per tonne, which is 24% or 7,500 yen higher than the beginning of the year. Local steel makers could only secure the requirement but couldn’t build scrap inventory under tight supply with higher scrap demand at home and abroad. Local makers now increase the scrap purchase price more to build inventory. Kishiwada Steel increased the purchase price by 500 yen per tonne on Friday, which was the first hike since March 23. Japanese electric furnace steel makers usually increase the output during a-week long holiday in early May due to the lower electricity cost. Many local electric furnaces around Osaka plan to reduce output level after the holiday and could reduce the scrap purchase volume. On the other hand, electric furnace steel makers around Tokyo keep the scrap purchase price at 35,000-36,000 yen per tonne for H2 and some pay 37,500 yen. The price level meets the scrap export FAS price from Tokyo bay.