Japan Ferrous Scrap Market Price Hits Below 30,000 Yen/t

Ferrous scrap purchase price by Japanese electric furnace steel makers hit below 30,000 yen per tonne (H2 grade) for the first time in 2 months. The latest price is around 28,500-30,000 yen, down by 1,000 yen from last week. The price is below 30,000 yen not only in Tokyo but around Osaka when scrap export is weak. Newly contracted export price fell below 30,000 yen in early October and currently stays at around FOB 290,000 yen. Japanese large dealer source said scrap export is stagnant for East Asian market due to strong yen trend and continuously lowering domestic market price despite of firm demand from South Korea.

Electric furnace steel makers around Tokyo purchase H2 at 28,500-29,500 yen this week and some pay as high as 30,000 yen. The price downed by 1,000 yen from last week. The makers have reduced the price by total 2,000 yen this month. Export price continues decreasing at Tokyo Bay and represents lower than local electric furnaces’ purchasing price. Local market price may decline more, said a large scrap dealer.

Around Osaka, electric furnaces purchase H2 at 29,000-30,000 yen and some pay as high as 31,500 yen. Local electric furnaces including Osaka Steel, Godo Steel and Shin Kansai Steel lowered the purchase price on and after October 9 to follow Tokyo Steel Manufacturing’s price down on the same day. The purchase price decreased by 500-1,000 yen at the end of last week. Meanwhile, some makers didn’t change the purchase price for turning steel scrap.

One trader said price gap is narrowing between high grade scrap and below H2 grade scrap when dealers’ shipment is decreasing to integrated steel makers. In Osaka, the shipment of local scrap dealers’ joint export is scheduled this week and next week. However, some dealers said regional market price may maintain downward trend.