Japan Integrated Steels Use More Ferrous Scrap

Ferrous scrap purchase by Japanese integrated steel makers increased to as same as the recent peak in 2008. The converters’ ferrous scrap consumption was increased by 0.2 percentage point to 14.7% of the raw steel output in January, which was the second highest in the past 5 years, according to Japan Ferrous Raw Materials Association. The record was 15.3% in August and October 2008. The integrated steels increase the scrap purchase while the electric furnace steel makers’ output remains low. The scrap consumption by integrated steels was 1.163 million tonnes in January.

Domestic ferrous scrap market price increases due to the purchase by the integrated steels while the new export order is slow for East Asia. The integrated steels seem to increase the scrap stock before significant increase in steel raw materials price, according to one trade firm source.

Some integrated steel pay more than 40,000 yen per tonne including freight for high grade ferrous scrap including HS grade and new cutting scrap. The dealers increase the sales of high grade scrap to the integrated steels while the electric furnaces reduce the purchase volume.