Japan Integrated Steel Makers’ Ferrous Scrap Purchase Price is High

Japanese integrated steel makers’ purchasing price of ferrous scrap achieved at 30,000 yen per tonne for high grade ferrous scrap. The makers increased the purchasing volume from the market since October when they must increase the output of steel products for export. Because they purchase it from other area of each iron works by ship due to low yield of ferrous scrap, pickup price of ferrous scrap in each bay is rising. Higher purchase price by them is pulling up the market price.

Japanese electric furnace steel makers’ purchase price of ferrous scrap is 27,000-28,000 yen per tonne for HS grade or new cutting scrap, while Japanese integrated steel makers’ purchase price is 31,000-32,000 yen. A dealer source said the purchase price of integrated steel makers is higher than electric makers’ price under freight, dealers are aggressively supplying to integrated steel makers.

Ferrous scrap demand from electric furnaces decreased by 30-50% from last year, while the demand from integrated steels is high. The purchasing volume is expected to be around 100,000 tonnes for Oita iron works of Nippon Steel in November, around 50,000 tonnes for Hirohata iron works of Nippon Steel and around 80,000 tonnes for West Japan iron works of JFE Steel. These purchasing volumes are expected to be same from peak level in last year.

The purchasing volume of integrated steel makers is expected to keep firm within this year. However, a dealer source said the demand isn’t clear for January-March 2010, the purchasing volume may reduce if steel products export decreases to East Asia.