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The domestic ferrous scrap market expanded rapidly in the first quarter of 2022. But while demand for scrap continued to increase, domestic generation was sluggish; the supply/demand balance has remained tight and the global increase in the price of resources owing to the Ukraine crisis has greatly boosted the ferrous scrap market.

On April 12, the Kanto tender’s winning joint export bid for 10,000 tonnes was Yen 67,010 per tonne (US$ 515.46). This equates to an increase of Yen 3500 over the winning bid in March and was second only to the July 2008 figure of US$ 67,750 (US$ 521.15).

With Chinese New Year and the Beijing Winter Olympics overlapping in February, China’s crude steel production cuts were remarkable, decreasing by 9.7% month on month and 10% year on year to 74.964 million tonnes and thus falling below 80 million tonnes for the first time in three months.

Subsequently in March, crude steel production across the 64 countries reporting their data to the World Steel Association was around 161 million tonnes, down 5.8% year on year. According to the Japan Iron and Steel Federation’s Crude Steel Production Bulletin, the country’s output in March was around 8 million tonnes, down 4.3% year on year. Crude steel production in Japan has been impacted over recent months by a slowdown in the positive reaction to the drastic COVID-related decrease and also by prolonged vehicle production cuts.

According to Ministry of Finance and Trade Statistics, Japan’s ferrous scrap exports amounted to 512,867 tons in February this year, up 69.6% month on month but down 19.8% year on year. January’s total of 302,424 tons was the first time the monthly figure had fallen below 400,000 tons since the 380,291 tons recorded ten and a half year earlier in July 2011. After ferrous scrap exports had registered year-on-year declines for nine consecutive months, February saw the 500,000 tons mark surpassed for the first time since the 513,546 tons recorded in October last year. South Korea was Japan’s leading customer for the ninth straight month, with its purchases rising 27.3% month on month and 13.5% year on year to 285,913 tons - the second consecutive month of increase.