Japan domestic scrap market showing early signs of recovery

By Anil Mathews (ScrapMonster Author)

December 08, 2015 05:08:19 AM

TOKYO (Scrap Monster): According to market experts, Japan’s domestic scrap market is likely to settle down during the last month of the year. The market has already shown some indications of a gradual but weak rebound during latter half of November this year. The prices had come out of a prolonged downward trend during early-November.

Scrap traders across the nation believe that there are limited chances for a sudden upswing in scrap prices. However, downside seems to be capped for the time being. There has been a slight uptick in the negotiated prices for ferrous scrap exports out of the country. The ferrous scrap export prices of No 1 HMS to Turkey during November witnessed rebound for the first time in almost six months.

The domestic ferrous scrap prices in the Japanese Tokyo Bay region increased by Yen 500 per ton towards end-November. The export deals to Vietnam and Taiwan managed to settle at higher prices. Correspondingly, certain electric steelmakers in the region have hiked their ferrous scrap purchasing prices. However, ferrous scrap dealers fear that the low crude steel production levels by Kanto area steelmakers may dim the prospects of a major recovery in prices. Incidentally, Tokyo Steel has kept its scrap buy prices unchanged at Utsunomiya works for more than a month now.

Temporary shutdown by steelmakers for seasonal maintenance works may impact ferrous scrap prices in Osaka area. After Osaka Steel Co, other major producers including Kishiwada Steel Co and Godo Steel Ltd plan to shutdown their facilities during this month. The crude steel production by the region is likely to drop from 30,000 tons in November to 23,000 tons this month.

In short, signs of uncertainty still exist, but a modest rebound in the country’s domestic ferrous scrap prices is on the horizon.