Japanese ferrous scrap transaction got slow since end of January when the scrap price increased to same level as offshore market and the domestic supply is tight. However, the exporters will ship large volume of scrap for existing orders. A dealer source said the slower export transaction has no impact on the domestic market.

 

The scrap export price is FOB 23,000-24,000 yen per tonne from Tokyo bay, which is 2,000-3,000 yen lower than the peak in late January. The major buyers in South Korea will get 300,000-400,000 tonnes of cargos from USA in the month. A Japanese trader said South Korean buyers are reluctant to purchase high priced Japanese scrap now. Offshore buyers still have interests in Japanese scrap. Japanese exporters and offshore buyers try to find the trend in the negotiation.

 

The scrap export price from Tokyo is slightly higher than purchase price by local electric furnace steel makers. However, a trading firm source said the exporters could have trouble to secure cheap scrap for potential export order to ship in mid-March under tight scrap supply. 

 

Japanese scrap exporters got large volume of export order from East Asian buyers from end of 2008 to mid-January. The export transaction price lifted the domestic market price. Japanese electric furnace steel makers increased the scrap purchase price by 5,000 yen per tonne in January. The increase in domestic market eliminated the price gap with offshore market.

 

Osaka's scrap dealers association held joint scrap export tender on Tuesday to contract at FAS 23,150 yen per tonne from Osaka bay for H2 grade. The winning bidder will ship 5,000 tonnes of scrap by March 14. The price is same level as 19,500-22,000 yen per tonne of local electric furnace steel makers. A trading firm source said the tender result could have little impact on the local market while the tender supports the local price. –Japan Metal Bulletin