Ferrous scrap supply is likely to maintain tight around Tokyo within this year. Demand is strengthening for ferrous scrap when electric furnace carbon steel makers are increasing outputs and scrap export to East Asia maintains high level although local electric furnaces plan year-end and New Year holidays for 5-7 days. One scrap trader said the market price is unlikely to decline within December.Around Tokyo, electric furnaces’ output keeps around 450,000 tonnes per month since September, higher than the usual level at 400,000 tonnes, according to one large dealer source. Rebar production is increasing mainly for condominiums. H-beam production is also increasing for building redevelopment projects. Ferrous scrap export maintains firm to East Asia. South Korean steel makers continue stable orders to Japan while Chinese steel makers restarted Japanese scrap procurement since the Great East Japan Earthquake. Ferrous scrap export from Tokyo Bay currently exceeds 50,000 tonnes per week. The export price is also rising. Tokyo Steel Manufacturing, Japanese largest electric furnace steel maker, raised the purchase price on Wednesday, which was the fifth hike this month. Domestic scrap market price has surged by 4,000-5,000 yen per tonne since late November. One scrap dealer suggested the market price would keep upward trend toward early January to reflect domestic supply tightness and U.S. scrap market price upsurge. Electric furnaces around Tokyo presently purchase H2 at 31,000-32,500 yen per tonne. Utsunomiya works of Tokyo Steel raised the purchase price by 1,000 yen on Wednesday and other steel makers followed the hike. Local scrap dealers have reduced their inventories since the market price had lowered until November and scrap generation has maintained low. Thus the supply to makers is tightening.
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