Japanese scrap sees price drops in December
Japanese steelmakers announced
scrap procurement price cuts around Yen 500/mt ($4) this week as they reduced
production due to low sales prices.
Current H2 grade
scrap prices in
Japan are around Yen 23'000-23'500/mt ($90-95) in
Japan.
Tokyo Steel's purchase price for its Okoyama Works fell from Yen 27'000/mt ($224) on November 17 to Yen 26'000/mt ($216) today.
There are two main reasons behind the decrease in prices:
The first one is the fall in hot rolled coil prices in the fourth quarter, which has also led the Japanese steelmakers cut their
production.
Second, the supply of
scrap increased as the
scrap sellers wanted to sell as much as
scrap as they can in December to cash in before the new year.
However, the prices of ferrous
scrap futures offered by Central
Japan Commodity Exchange are relatively high and gaining strength. The settlement price of February 2006 dated ferrous
scrap futures increased Yen 110 from yesterday to Yen 25'500/mt ($212). This indicates that current decrease in the prices does not affect the attitude for the
scrap prices in 2006.