Japan Ferrous Scrap Consumption to Increase Slightly for Oct-Dec

Japanese ferrous scrap consumption is forecasted to increase slightly for October-December compared with the level in July-September. Main scrap users, electric furnace steel makers would increase scrap consumption as a rebound of output reduction during July-September. However, total consumption is unlikely to increase significantly due to unforeseeable steel market trend including export and domestic integrated steel makers are reducing scrap procurement from market.

Japanese crude steel shipment is forecasted at 28.21 million tonnes for October-December, according to Ministry of Economy, Trade & Industry. Ferrous scrap consumption was 32.1% of Japanese annual crude steel production in fiscal 2010 ended in March 2011, according to Japan Ferrous Raw Materials Association. The steel output against iron raw materials usage was 91.3% in fiscal 2010.

With these indicators, Japanese ferrous scrap consumption is estimated at approximately 9.918 million tonnes for October-December, increasing by 4.7% from the previous quarter. However, scrap consumption is unlikely to increase as much actually due to negative effects of flood in Thailand and weak economy in Europe and the U.S.A.

Japanese electric furnace carbon steel makers are increasing output volume of concrete reinforcing steel bar. On the other hand, integrated steel makers are likely to continue minimization of scrap procurement from market, according to several dealer sources. Thus demand for high grade ferrous scrap may decrease for October-December.