Japan's Kanto region sees rise in nickel-based stainless steel scrap prices

In Japan's Kanto region, there is a noticeable surge in the price of Ni-based stainless steel scrap. Despite a sluggish market and significant shortages, yards are actively gathering materials driven by optimistic forecasts. Over the past month, the market price for SUS304 scrap has surged by over JPY 10,000/t ($64/t) on the back of an 18% rise in chromium and 8% increase in nickel prices.

This increase in demand is further fuelled by manufacturers ramping up their scrap procurement, spurred by the depreciation of the yen and the heightened exports of nickel alloy-containing products. These factors contribute to a tightening in the supply and demand dynamics in the market.

There has been a sluggishness in the stainless steel scrap market for a while now, particularly evident in the gradual improvement of automobile-related factories' activities. Similar trends have been observed across other sectors, with an increase in the arrival of goods coinciding with the Golden Week, as reported by a yard contractor.

Despite this ongoing sluggishness and persistent shortage, major yard dealers in the Kanto region have been incrementally raising their purchase prices for SUS304 scrap since last month while intensifying their collection efforts.

This price hike is attributed to concerns over a potential uptick in shipper exports due to the yen's depreciation, along with optimistic projections for increased scrap procurement by major domestic and foreign manufacturers starting from June.

Furthermore, it has been highlighted that certain manufacturers in the Kanto region are bolstering their scrap procurement efforts. This move is driven by an uptick in production spurred by consistent exports of goods amid the yen's depreciation. Consequently, the pre-furnace price of nickel-based stainless steel scrap has surged to approximately JPY 220,000/t ($1,413/t).

In recent years, the stainless steel scrap market in the Kanto region has experienced a noticeable upward trend, largely influenced by shippers. Initially, this surge was attributed to shippers increasing their purchases to fulfill remaining export contracts. However, since the start of this year, stainless steel scrap exports to China, which had significantly grown over the past 23 years and become Japan's primary export destination, have slowed down.

The recent ascent of the stainless steel scrap market in the Kanto region can be attributed to multiple factors, including the expectations of market yard suppliers and the consistent export activities of certain manufacturers. This current market landscape differs from previous trends.

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