Higher Ferrous Scrap Price to Support Japan Scrap Market

Japanese ferrous scrap market price shows sign to hit bottom. A trading firm source expects the price could decrease a little more under decreasing steel price and major production cut by integrated and electric furnace steel makers while Asian steel makers resume the purchase of Japanese scrap. The higher export price could lift the domestic market and domestic electric furnace steel makers’ purchase price is approaching to 15,000 yen per tonne for H2 grade, which is the level for scrap suppliers to pay for lower grade scrap supply.

Domestic electric furnace steel makers pay 16,000-17,000 yen per tonne for H2 grade in Tokyo and Osaka. The price decreased by 5,000-6,000 yen from the peak in February after the increase by 5,000-6,000 yen from the beginning of the year to February.

With lower electric furnace steels’ purchase price, the scrap dealers could reduce the scrap purchase price. Such trend could reduce scrap supply from generators and manufacturers’ plants. Some demolition contractors try to hold the scrap if they can extend the lead time while some yard dealers try to build inventory for high grade scrap.

Japanese scrap export price reached FOB 18,000 yen per tonne for H2 grade for East Asia, which is higher than purchase price by domestic electric furnace steel makers. The higher export price is expected to support the domestic market.