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|Domestic Mkt Enters Upward Phase for The 1st Time in 5 months|
|= The price increase in both Kanto and Kansai spread from February 14 =|
The domestic ferrous scrap market really rebounded, and it entered an upward trend for the 1st time in 5 months since last September. The wining bid at the tender of Kanto Tetsugen Cooperative Association for March shiploading, which was held on February 13, marked Y 31,855 FAS, which was high price, exceeding the price in the domestic market. After Tokyo Steel decided to raise a purchase price by Y 500 in all bases in the evening of February 13, the electric steelmakers across the country followed it, and spread. Many market participants expected that the rebound phase would continue. It is expected that the domestic market would be likely to keep firmer tone toward the end of the month. |
<>Benchmark price of H2 ex works in Kanto increased to Y 30,500
In the Kanto area, after Utsunomiya Plant of Tokyo Steel implemented increase of purchase price of No.2 HMS ex Plant from February 14, which was for the 1st time since September 19, 2018, electric steelmakers in the area, which was more than half of the total, followed it and increased a price by Y 500. Some electric steelmakers, which had kept low price, raised a price by the range of Y 2,000. There were correction from low price and spot deals in the Kanto area by last week. The price increase by electric steelmakers in the area almost spread so far.
As of February 14, the benchmark market price of No.2 HMS ex works at the ferrous scrap market in the Kanto area was around Y 30,500. While the low price at Y 28,000 level still remained, the benchmark price in north Kanto was Y 30,500 to 31,000, and the target of high price was Y 31,500. The price ex works varied. But the recent benchmark market price increased gradually.
According to some supplier, the ratio of arrival of ferrous scrap to the electric steelmakers in the area kept averagely 100%. The market had a bearish factor, as there was a high possibility that the purchase of ferrous scrap by Funabashi Works of Godo Steel would stop for a while, because the backup transformer of that works, which had been exchanged, broke down on February 9. But the high-leveled shiploading continued in the Tokyo Bay area, and the supply and demand balance of heavy scrap became tight, according to some supplier. In addition to this, it is expected that ferrous scrap business operators would postpone the arrangement of shipment, because of bullish sentiment. Many suppliers expected that the Kanto market would keep upward trend for a while, approaching the tender result of Kanto Tetsugen Cooperative Association at Y 31,855.
<>The price increase by Y 500 from February 14 spread in the Kansai Mkt
In response to the increase of purchase price by Okayama Plant of Tokyo Steel, the price increase of electric steelmakers in the Kansai area by Y 500 from February 14 spread. In the Osaka area, Sakai Works of Osaka Steel, Hirakata works of Kyoei Steel, Kurimoto, and Nakayama Steel Products increased a price by Y 500. In the Himeji area, 4 electric steelmakers, such as Himeji Works of Godo Steel, Sanyo Special Steel, Himeji Works of JFE Bars & Shapes and Yamato Steel, increased a price by Y 500 all together. Because some electric steelmakers in the area, such as Kishiwada Steel, increased a price in advance, the price increase in the area generally spread so far.
As a result of that, as of February 14, the benchmark market price of No.2 HMS ex works in the Kansai area was around Y 29,500 to 30,000. The benchmark market price was around Y 30,000, which was located at the upper side of the range, and the target of high price increased to more than Y 30,500.
Although the average arrival ratio of ferrous scrap to the electric steelmaker in the Kansai area maintained almost equivalent to the quantity of usage, the status of arrival of ferrous scrap seemed to slow down, according to some supplier. The Kansai market, which had kept flat with staying on the sidelines, began to turn to bullish sentiment this week. Some market participants in the Kansai area pointed out that the tender result of Kanto Tetsugen Cooperative Association would be also likely to affect the trend of the market. It is expected that rebound phase would be likely to continue in the Kansai market.
|last modified : Thu 21 Feb, 2019 [12:55]|