Higher Ferrous Scrap Price in Tokyo

Electric furnace steel makers around Tokyo increase the ferrous scrap purchaser prices to averaged 30,500-31,500 yen per tonne for H2 grade. Tokyo Steel Manufacturing increased the purchase price and others followed the move. The price could increase more when scrap export price from Tokyo bay is increasing. Tokyo Steel’s Utsunomiya plant increased the scrap purchase price by 2,000 yen 33,000 yen per tonne for H2, 34,500 yen for new cutting scrap without press and 26,500 yen for steel turning scrap on Wednesday. Other local makers followed the move to increase the price by 1,000-2,000 yen. They pay 30,500-31,500 yen per tonne for H2 and some pay as high as 33,000 yen. Scrap export price from Tokyo bay is around FAS 33,000 yen per tonne, which is higher than purchase price by local steel makers. With the higher export price, local steel makers increased the price to the level in the end of 2006 after the 3,000 yen drop in January. Ferrous scrap price also turned into strong around Osaka. The market price increased by 500 yen per tonne last week when export tender price hit record both in Tokyo and Osaka on February 9. The market expects higher price especially after Tokyo Steel increased the scrap purchase price at all plants on Wednesday. Some steel makers around Osaka already increase the purchase price. The market expects the local scrap supply keeps tight for a while due to 10,000 tonnes of shipping for export order at tender by Kansai Tetsugen and potential 5,000 tonnes of shipping for coming tender by other scrap group in Osaka. Hyundai Steel of South Korea increased the scrap purchase offer to Japanese dealers at the tender on Wednesday. The offer is said to be around FOB 34,000 yen per tonne for H2 grade and 37,000 yen for new cutting scrap, which were 1,100 yen and 500 yen higher than tender in previous week.