Japan Ferrous Scrap Hits First 30,000 yen/T in 5 Months

Japanese ferrous scrap price increased to 30,000 yen per tonne for the first time since September 2009. Japanese electric arc furnace steel makers plan to increase the output in February-March compared with the level in January and scrap inventory is low at the makers. The electric furnaces purchase the scrap from dealers in other areas to secure the requirement. The scrap market price is likely to keep firm when the scrap export continues and integrated steel makers increase scrap purchase.

The electric furnace steel makers pay 28,500-29,500 yen per tonne for H2 grade around Tokyo and the higher price is around 30,000 yen. The export price decreased by 1,000-1,500 yen to FOB 30,500-31,000 yen to South Korea compared with the peak. However, the dealers have backlog to export until early March. The dealer sources see the price would not decline until early March while the domestic scrap supply remains low.

The electric furnaces’ purchase price is 29,000-30,000 yen per tonne for H2 around Osaka while some makers pay around 31,000 yen. Some makers increased the purchase price by 1,000 yen last week and the integrated steels increased the scrap purchase from the dealers around Osaka.