Firm Ferrous Scrap Price in Tokyo

Ferrous scrap market price is firm around Tokyo when the market leading export recovers for East Asia. The dealers pay around 17,000 yen per tonne for H2 grade scrap while local electric furnace steel makers pay 23,000-24,500 yen for H2 grade. The price is expected to keep firm when the local supply is likely to get tighter due to higher export.

The export was slow from late-September to mid-October when Japanese scrap price was higher than international level and Chinese buyers were off during National Day holiday. Local electric furnace steel makers reduced the scrap purchase price by around 6,500 yen per tonne in the half month due to easier local supply under lower export shipping from Tokyo bay. Some dealers liquidated the scrap inventory at lower price when some steel makers reduced the scrap purchase volume.

Kanto Tetsugen’s monthly export tender was concluded on October 14 with slightly higher export shipping price for H2 than local steel makers’ purchase price. At the tender, the winner exporters were expected to ship 11,000 tonnes in October as a part of 22,000 tonnes of export contract. The market participants started to expect tighter supply and higher price.

Chinese buyers, which reduced Japanese scrap import since summer, increased the import while South Korean buyers imported Japanese scrap constantly. The scrap export transaction increases gradually to East Asia since mid-October. The export price is around FOB 24,000 yen per tonne.

Tokyo Steel Manufacturing’s Utsunomiya plant and other local makers around Tokyo increased the scrap purchase price by 1,000-2,500 yen per tonne last week, which was the first increase in one and half months. The makers’ consumption is still low level but the local scrap supply is expected to keep tight due to higher export shipping and low level scrap generation. Some dealers expect the scrap price is still uncertain when steel market is still weak with decreasing price and low level demand.