Japan Ferrous Scrap Supply to Keep Tight for Jan-Mar

Japanese ferrous scrap supply is expected to keep tight situation for January-March 2010. Electric common steel makers would continue output reductions. Meanwhile, scrap dealers’ shipment volume maintains low due to decreasing scrap generation. Japanese ferrous scrap export is active to East Asia.

The demand for crude steel is forecasted at 26.72 million tonnes for January-March 2010 in Japan, according to Ministry of Economy, Trade & Industry. The consumption rate of ferrous scrap was 33.6% against crude steel output in fiscal 2008 (April 2008-March 2009). The demand for ferrous scrap is calculated at 9.844 million tonnes for January-March 2010.

Ferrous scrap consumptions by domestic electric furnaces remain low. The consumption volume had increased for April-December 2009. However, a dealer source said the consumption wouldn’t increase widely for January-March. On the other hand, Japanese integrated steel makers continue active purchase of ferrous scrap from the market since last autumn.

Japanese ferrous scrap export hit the record highest in CY2009. There seemed large quantity export contracts during December-January at total 700,000-1,000,000 tonnes. Shipping of contracted scrap will continue until early March. Domestic scrap supply is expected to keep tight due to strong shipment from quays.

Ferrous scrap dealers are suffered from low material arrivals at their sites in January. Scrap generation keeps slow. A dealer source said they sometimes pay the price as high as steel makers’ purchasing price around Tokyo.