Japan Ferrous Scrap Price Rebounds

Japanese ferrous scrap price rebounded for the first time in 2 and half months when domestic steel makers raise the purchase price to compete higher export price. Electric furnace steel makers pay 28,000-30,000 yen per tonne for H2 grade scrap in Tokyo and Osaka, which is 1,000-1,500 yen higher than previous week. However, the industry interests are still skeptical if the price trend could keep longer when steel demand is still low level.

Japanese scrap export price has increased gradually since late October reaching around FOB 29,000 yen per tonne for H2 grade. Offshore buyers returned to Japanese scrap due to the cheaper price level than other sources.

With the higher export price, local scrap dealers and trading companies increased the scrap purchase price. Local steel makers were forced to increase the scrap purchase price to secure the volume.

Some of electric furnace steel makers around Tokyo started to increase the purchase price last week and other makers followed the move in the week. They pay 28,000-29,500 yen per tonne for H2 scrap in the week, which is 1,000 yen higher than previous week. The price level is now catching up with export FAS price.

Electric furnace steel makers also increase the scrap purchase price after Tokyo Steel Manufacturing’s increase. They pay 28,000-30,000 yen per tonne for H2 grade. Some makers purchased scrap at spot basis last week. Kishiwada Steel raised the purchase price by 500 yen on Friday. Tokyo Steel raised the price again and Kishiwada Steel also increased the price by another 500 yen for steel turning scrap and by 1,000 yen for other scrap grades. Yamato Steel and JFE Bars & Shapes’ Himeji plant increased the price by 1,000 yen.

Other makers around Osaka keep the purchase price level. However, scrap dealers see they couldn’t secure scrap at the low price and will have to do some actions including price increase and wider spot purchasing.