Ferrous Scrap Price Keeps Dropping in Tokyo

Ferrous scrap purchase price by electric furnace steel makers decreased to less than 40,000 yen per tonne around Tokyo. The price is around 36,500-38,500 yen for H2 grade while some makers pay as high as 40,000 yen. They reduced the purchase price for 3 days in a row under easier supply balance. The price is much lower than recent peak of 70,000 yen in early July.

Many of the local makers reduced the price by 2,000 yen per tonne on Thursday and by 3,000 yen on Friday. The dealers’ option is limited when many local makers limit the scrap acceptance while the makers are finishing the seasonal maintenance outage.

Tokyo Steel Manufacturing’s Utsunomiya plant reduced the scrap purchase price by 1,000 yen to 40,000 yen per tonne for H2 grade on Saturday. Other makers followed the move.

However, Hyundai Steel of South Korea is showing the attempt to buy Japanese scrap again at around FOB 41,000 yen per tonne level for H2 while the maker was reluctant to buy high priced Japanese scrap. The higher bid by offshore maker could support the local price around Tokyo.

Ferrous scrap purchase price by electric furnace steel makers around Osaka also decreases to around 40,000 yen per tonne for H2 grade. The local makers also followed the move by Tokyo Steel’s price reduction for 3 days in a row.

The makers around Osaka pay 40,000-41,000 yen per tonne for H2 grade, which is the level in the beginning of the year. The makers around Osaka and Himeji areas reduced the price by 8,000 yen last week and by more than 30,000 yen in one and half months. The local dealers expect the price could decrease more due to oversupply around Tokyo and lower export price while major export sales could stop the downward move.