Makers’ Scrap Purchase Price Drops in Tokyo and Osaka

Ferrous scrap purchase price by electric furnace steel makers dropped around Tokyo when the export price hit the ceiling. The purchase price decreased to 27,500-30,000 yen per tonne for H2. A dealer source said the price down is a temporary effect by static export. He said the demand for ferrous scrap keeps firm when integrated steel makers and special steel makers are increasing their outputs step by step.

Ferrous scrap export price rose to around FOB 30,500 yen per tonne in mid September. However, export negotiation is recently deadlock since Japanese ferrous scrap price became higher than other countries’ due to strong exchange rate of yen. The amount of new export contracts is gradually decreasing.

Electric furnaces’ purchase price decreased at the end of last week. Price turned down for the first time in a month. Tokyo Steel Manufacturing decreased the purchase price by 1,000 yen per tonne on Friday. Other makers followed the price down.

Ferrous scrap arrivals maintain low at dealers’ sites in response to little scrap generation around Tokyo. Makers’ purchase volume is unlikely to increase widely.

In Osaka region, Osaka iron works of Godo Steel reduced the purchase price by 1,000 yen per tonne on Friday and Yamato Steel reduced the price by 500 yen, too. Local electric furnaces’ purchase price is 29,500-30,500 yen and some pay as high as 31,500 yen. The purchase price decreased for the first time in 2 weeks. A large dealer source said the price reduction is likely to spread because the price in Osaka area is higher than other areaa by 500-1,000 yen.