Japan Ferrous Scrap Export to South Korea to Lift Domestic Market Price

Ferrous scrap market price is flat with potential weakness at around 28,000 yen per tonne for H2 grade at the dealers’ purchase price including freight around Tokyo. The local electric furnace steel makers’ purchase price is 33,500-34,500 yen for H2 grade, which is 500 yen lower than the level in last week, while some makers pay 35,000 yen.

The dealers are increasing ferrous scrap supply to local electric furnaces due to improvement of gasoline availability. However, the scrap demand decreases due to slower export, according to trade firm sources.

Ferrous scrap market price around Osaka is flat at around 28,000 yen per tonne for H2 grade at the dealers’ purchase price including freight. Local electric furnaces pay 36,500-37,500 yen for H2 grade.

The local ferrous scrap market price is around 3,500-4,500 yen per tonne lower than the level in the beginning of March. However, the dealer sources see the price decline would stop along with increasing scrap export transaction with South Korea.

South Korean import transaction with Japan slowed shortly after the major earthquake occurred on March 11. However, a trading firm source said South Korean scrap importers restarted the transaction in late March when Japanese scrap price is lower than the US scrap level while radiation on Japanese scrap is ignorable so far.

A Japanese trader firm source said Chinese scrap importers rejected the mixed metals import from Japan in March due to Chinese severer radiation control than in South Korea. The source said the Chinese importers are also reluctant to import ferrous scrap from USA when the US scrap price is higher than the Japanese scrap. The source sees US ferrous scrap export offer price for China is CFR US$ 490-495 per tonne for No.1 heavy melting grade, which is around US$ 10 higher than the offer for South Korea.