Japan: Sluggish demand for scrap continues in Osaka region, impacts prices

Demand for ferrous scrap from steel mills using the electric furnace route in the Osaka region of Japan continues to be sluggish. As a result, prices in the region have continued to decline, and there seems to be little likelihood of a rebound.

Exports to Asia are still not fetching good prices. As a result, shippers are not eager to buy, and demand for exports remains sluggish.

Manufacturers in the Himeji area of Osaka are cautious of buying scrap because they have a certain amount of inventory. In addition, they have no plans to increase production amid the lack of growth in demand for finished steel.

Export and domestic demand are lacklustre, and supply is outstripping demand. Amid these conditions, some manufacturers cut their prices by Yen 500/tonne in quick succession at the end of last week. The actual bid price of electric furnace manufacturers in the Osaka area is centered on H2 at Yen 50,500/t. A trading company source said, "Manufacturers want to adjust the bid price taking finished product prices into account."

The steel scrap industry wants to speed up shipments and reduce inventories due to anticipation of a rise in demand, but it seems it has not been able to significantly reduce inventories due to the narrowing number of sales destinations. While the number of suppliers is limited, many feel that "tough business conditions will continue in the short term".

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