Lower Japan Ferrous Scrap Price

Japanese ferrous scrap market price decreased to hit year-low. The market is slow due to low level export price under high yen rate. Local electric furnace steel makers reduced the scrap purchase price around Tokyo and Osaka when Tokyo Steel Manufacturing reduced the purchase price by 500 yen per tonne at all plants on Thursday.

Tokyo Steel’s Utsunomiya plant reduced the scrap purchase price as second down in the month. Local other makers reduced the scrap price by 500 yen per tonne on Thursday. The makers pay 33,500-34,500 yen per tonne for H2 grade. The price keeps decreasing since late July and the price is more than 1,500 yen lower than the level in early July.

Successful bid was around FAS 33,300 yen per tonne at monthly export tender by Kanto Tetsugen on Wednesday. The export price, which was less than local makers’ purchase price, encouraged the makers to reduce the purchase price.

The scrap export price is decreasing due to slow South Korean scrap market. Japanese scrap price decrease is still small under balanced supply but the price could decrease more without positive factors when local steel makers plan major maintenance outage in later August.

Ferrous scrap market price is also weak around Osaka due to slow export market and lower purchase price by Tokyo Steel. Local makers pay 34,500-36,000 yen per tonne for H2 grade scrap. Some makers’ purchase price decreased to less than 35,000 yen for the first time in around 8 months.

Osaka Steel and Shinkansai Steel reduced the scrap purchase price by 1,000 yen per tonne on Thursday. Kishiwada Steel reduced the purchase price by 1,000 yen for steel turning scrap and Nakayama Steel Works reduced the scrap purchase price by 1,000 yen for turning scrap and by 500 yen for other scrap grades. Kyoei Steel, Nakayama Steel Products, Godo Steel’s plants in Osaka and Himeji, Yamato Steel and JFE Bars & Shapes’ Himeji plant reduced the scrap purchase price by 500 yen.

Japanese electric furnace steel makers usually build scrap inventory around Japanese major mid-summer holiday when the dealers stop the operations. However, a scrap dealer said many of the steel makers already have enough scrap stock now and they don’t purchase scrap at spot basis in the summer.