Japanese ferrous scrap prices have risen to their highest levels in six months, amid signs of increased demand from the country’s construction sector.
The country's biggest EAF operator, Tokyo Steel has lifted its purchase prices for the third time in less than two weeks.
The company has increased its prices by ¥500 ($6) per tonne for shipments to all five of its works, effective from April 4 delivery.
As a result, the new delivered prices of H2 grade are ¥35,500 per tonne for seaborne arrivals and ¥35,000 per tonne for overland arrivals at its Kyushu and Okayama works; ¥35,500 per tonne for seaborne/overland arrivals at Tahara; ¥34,500 per tonne for overland arrivals at Utsunomiya and ¥33,000 per tonne for seaborne/overland arrivals to Takamatsu.
The only silver lining for the company in the latest hike, which has pushed its scrap costs to their highest level since early October 2011, is that it will provide Tokyo Steel with further ammunition to push through additional price increases for its products.
The company raised its April selling prices for all products, with the exception of heavy plate, by ¥2,000 per tonne and said that it will look to raise its selling price yet further in the coming months.
Meanwhile, the national average price of scrap has also risen sharply, up by ¥1,987 per tonne from last week, according to the Japan Ferrous Raw Materials Association. Prices are now up for three straight weeks.
“The rise in scrap prices seems to be mainly due to domestic factors such as a slight increase in demand from mini-mills amid a rise in construction activity. But it is hard to say whether scrap prices will continue to increase or not”, a senior official at the association told Metal Bulletin.