Search Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.

Japanese scrap price could be set for decline

Keywords: Tags  Japanese scrap, Tokyo Steel, Hyundai Steel, H2 scrap, ferrous scrap, scrap exports, scrap prices

TOKYO — Japanese ferrous scrap prices have hit their highest levels in well over a year, but the increase could stall, market sources said.

The national average price of H2-grade scrap (a mix of No. 1 and No. 2 heavy melt) stood at ¥33,436 ($354) per tonne this past week, up ¥811 ($9) per tonne from the previous week and the most expensive level since October 2011.

Domestic scrap prices have been driven higher by several factors, including higher iron ore and coking coal prices and a weak yen, which has fueled heavy buying from South Korean mini-mills.

Data from the Korean trade ministry shows that imports of Japanese scrap rose by around 26 percent in January and February compared with year-earlier levels, while imports of scrap from Russia and the United States plunged by about 50 percent in February.

That heavy interest has forced Japanese scrap prices higher. The latest export tender held by Tokyo-area scrap dealers earlier this month saw the average winning bid for deliveries of H2-grade scrap for next month rise by ¥1,337 ($14) per tonne to ¥34,915 ($369) per tonne f.a.s. from the prior auction price, marking the highest level in more than a year.

However, there are signs that the rally in prices could be losing steam, with reports that Hyundai Steel Co. Ltd. last week purchased two batches of H2-grade scrap from Japan at ¥35,000 to ¥35,500 ($370 to $376) per tonne f.o.b., down ¥300 to ¥500 ($3 to $5) per tonne from prior purchases.

Any fall in export prices will carry over to the domestic scrap market, especially after Tokyo Steel Manufacturing Co. Ltd. failed to raise its selling prices for next month. The inability by the country’s largest electric-arc furnace operator and effective benchmark price-setter to hike its product prices means it will look to put as much of a lid as it can on rising scrap prices.

A version of this article was first published by AMM sister publication Steel First.

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Latest Pricing Trends