Japan Ferrous Scrap Supply Expected to Keep Tight for April-June

Ferrous scrap supply is forecasted to maintain tight in Japan for April-June. Domestic demand of ferrous scrap keeps stable while scrap generation volume stays very low and offshore importers continue to offer Japanese ferrous scrap aggressively.

Japanese domestic demand of crude steel is forecasted at 26.17 million tonnes for April-June, according to Ministry of Economy, Trade and Industry. Japanese ferrous scrap consumption rate was 33.6% against crude steel output in fiscal 2008 ended in March 2009, according to Japan Ferrous Raw Material Association. The yield of crude steel production was 91.2% in fiscal 2008. Calculated by these figures, ferrous scrap demand is estimated at 9.643 million tonnes for April-June.

Electric furnace carbon steel makers, the main users of ferrous scrap, are likely to keep stable production of crude steel for April-June. Meanwhile, domestic integrated steel makers are increasing ferrous scrap procurement from the market.

Scrap dealers’ inventory stays low when ferrous scrap generation maintains stagnant. On the other hand, overseas importers continue aggressive offers for Japanese ferrous scrap. One dealer source said ferrous scrap supply is unlikely to loosen for April-June.