Ferrous Scrap Price in Wait-and-See Mood, Tokyo

Ferrous scrap market price is in wait-and-see mood around Tokyo with active export to East Asia and low scrap generation in Japan despite of slow operation of local electric furnace steel makers. Primary scrap dealers pay around 14,000 yen per tonne for H2 grade and local electric furnaces pay around 21,000-22,000 yen per tonne.

Most of local electric furnace steel makers raised scrap purchase price by 4,000-5,000 yen per tonne in April to increase procurement volume. Scrap dealers followed the makers’ hike and raised their purchasing price.

Ferrous scrap export price for East Asia is currently set at around FOB 23,000 yen per tonne for H2, surging by 3,000 yen from previous month. The export price is higher than domestic makers’ purchase price. Some of South Korean steel makers slightly reduced their offer price to Japanese exporters when a large lot of scrap delivery from USA is scheduled in June.

Domestic demand for ferrous scrap keeps low. Steel makers are still in output reductions. Ferrous scrap generation is low, too. Many dealer sources said their scrap purchasing volume keeps lower by 30-40% than a year earlier. Scrap arrivals at dealers are unlikely to increase in a short term.

Supply and demand are balanced. The active export is expected to continue until late May. Meanwhile, domestic scrap demand keeps decreasing.