Japan: Kansai scrap market sentiment cautious for Bon holidays ; Nagoya region price consistent

Japan's Kansai steel scrap market is experiencing a period of stagnation, coinciding with the Bon holidays. The market sentiment is cautious, and trading continues to take place within the existing price range.

In this region, both the demand for and the generation of steel scrap have exhibited minimal momentum before the Bon Festival. The situation has further exacerbated during the Bon holidays, with reduced activity. Many manufacturers have halted their operations, leading to lacklustre demand for scrap steel. Notably, export prices are more competitive than local rates, discouraging purchasing activity from overseas buyers. While some dismantling companies and factories remain operational during the holidays, their impact is limited. Industry insiders note that this year's scrap collection during the Bon holidays is slightly lower than usual, and certain facilities are closed for the summer.

Currently, the balance between supply and demand remains at a subdued level. A representative from a trading company mentioned that the initial sense of weakness has faded due to favourable outcomes in Kanto tenders and the prevailing market conditions. However, there is a notable absence of significant movements during the Bon period. Opinions about the market's trajectory post-Bon holidays are diverse, with some expressing uncertainty about making accurate predictions.

In the Nagoya region, the steel scrap market appears to be relatively stable. The upcoming week signifies a slowdown in cargo movement and price dynamics, as many dealers embark on their summer holidays. In the automotive sector, activity is anticipated to align with the recovery of automakers' production from the subsequent week onward. Meanwhile, there are some ongoing private civil engineering and construction projects, the focus lies on the trajectory of inquiries in the coming months up to early autumn. Certain consumers are applying downward pressure on prices, prompting product stakeholders to concentrate on sustaining the current pricing levels.

Scrap pricing has remained consistent. The recent joint export bid conducted by Kanto railway source resulted in a winning bid that closely matched the prevailing regional market rates, bolstering the market's resilience. This week, business operations have temporarily ceased. A decline in electric furnace stocks is expected, and the government is likely to actively secure raw materials post the Bon holiday period.

Note: This article has been published in accordance with an article exchange agreement between Japan Metal Daily and SteelMint.