Japanese Ferrous Scrap Market Price in Adjustment Phase

Ferrous scrap market price is weakening in Japan. In late April, local market price exceeded 40,000 yen per tonne for H2 grade around Osaka and became 2,000-3,000 yen higher than the price around Tokyo. However, electric furnace steel makers around Osaka have lowered the purchasing price since last week and the market price decreased to less than 40,000 yen again. In Tokyo, export price became lower than local electric furnaces’ purchasing price due to the slowdown of new export contracts.

Electric furnace steel makers around Tokyo pay 38,000-38,500 yen per tonne for H2 grade and some pay as high as 39,000 yen. The price stays flat from the end of March. Meanwhile, export price at Tokyo Bay declined by 1,000 yen last week and became lower than local electric furnaces’ purchase price.

Electric furnaces around Osaka pay 38,000-39,500 yen for H2 grade. Most makers lowered the purchasing price twice since last week and some makers announced the third price cut. The price cut range is averagely 1,500-2,000 yen or 3,000 yen in some cases.

Scrap dealers around Osaka analyze the main factor of the drop down is that local market price had been much higher than in other areas. Scrap dealers are increasing the shipment to steel makers because the price downturned. Meanwhile, a trader source said, supply and demand of ferrous scrap keep balanced and scrap dealers may restart stocks when the market price seems to hit the bottom.