Ferrous Scrap Price Hits Ceiling, Tokyo

Ferrous scrap market price is in a wait-and-see mood around Tokyo. Domestic demand is low along steel makers’ output reductions. Meanwhile, domestic scrap generation maintains little. At the same time, contracted export shipping for East Asia is scheduled to continue for a while. Domestic supply and demand balance keeps tight. A dealer source points out it is unforeseeable whether the market price turns downward. Primary dealers purchase H2 at around 15,500 yen per tonne while local electric furnace steel makers purchase H2 at 22,000-23,000 yen.

Most steel makers raised ferrous scrap purchasing price by 1,000-1,500 yen per tonen this month against active export. Dealers also raised the purchase price following the makers.

However, new contracts for ferrous scrap export grew stagnant in late May. Consequently, the market price hit the ceiling around Tokyo. Utsunomiya works of Tokyo Steel Manufacturing, Japanese largest electric furnace steel maker, raised H2 purchasing price by 500 yen per tonne but other makers didn’t follow the hike or several makers lowered the purchase price this week.

The export price is FOB 24,000-24,500 yen per tonne, higher than domestic market price. Recently overseas importers’ offer price is around FOB 23,500 yen per tonne. A large dealer source said overseas importers are maintaining the offers.