Japan Ferrous Scrap Price to Hit Bottom

Japanese ferrous scrap market price is calm but could hit bottom. Some electric furnace steel makers reduce the purchase price while the demand increases when integrated steel makers and special steel makers improve the operation rate and Tokyo Steel Manufacturing restarts the operation at Okayama plant.

A dealer source expects the market price hit bottom when electric furnace steel makers increase the steel selling price. The export demand is also expected to support domestic price depending on the transaction in the week when South Korean buyers increase the order.

Electric furnace steel makers pay 25,500-27,000 yen per tonne for H2 scrap around Tokyo. Japanese exporters are cautious on transaction for shipment in mid-August to September due to peaking price while offshore buyers show appetite for Japanese scrap.

Electric furnace steel makers pay around 25,000 yen per tonne for H2 grade around Nagoya. Some special steel makers reduced the purchase price on Wednesday, which is the first drop in 4 months. Higher supply of high grade scrap to special steel makers reduce the price when special steel makers increase the production volume to meet higher demand for automobile. However, trading firm source said the local supply keeps tight due to low level generation.

Electric furnace steel makers pay 25,500-27,500 yen per tonne for H2 grade scrap around Osaka. Yamato Steel increased the purchase price by 1,000 yen on Wednesday while Godo Steel reduced the price by 500 yen. A dealer source said the market price is peaking due to lower demand when many makers including Osaka Steel and Kyoei Steel plan major maintenance outrage from late July.