Japanese Integrated Steels Import Chinese Ferrous Scrap

Japanese integrated steel makers are starting import of Chinese ferrous scrap. The current arrival price is around US$ 465 per tonne (approximately 39,200 yen) for HS grade, according to Japanese large dealer source. JFE Steel recently contracted the import at 12,000 tonnes to the firm’s West Japan Works. Domestic market price is reaching 40,000 yen per tonne for high grade ferrous scrap supplied to integrated steels. One scrap dealer said JFE Steel contracted the import when the firm aims to diversify supply source while yen exchange rate is rising.

Ferrous scrap consumption by Japanese integrated steels has recovered since early 2009. Scrap consumption by converters keeps above 1 million tonnes per month since August 2009 and scrap utilization in converter steel stays above 14% since September 2009.

Domestic market price is relatively high for high grade scrap including new cutting and HS mainly consumed by integrated steel makers and special steel makers, while stays low for heavy scrap such as H2 mainly consumed by electric furnace steel makers.

JFE Steel seems to have bought new cutting scrap from South Korea which arrived in mid August. Chinese ferrous scrap exporters are currently offering around 40,000 yen per tonne for HS grade to Japanese integrated steel makers.

A domestic scrap dealer said it isn’t clear whether integrated steels keep active scrap consumption after October. Another dealer source says demand for high grade scrap is also steady from South Korean integrated steels including Hyundai Steel and, thus, high grade scrap market price is expected to stay high.