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After experiencing bearish conditions for more than three months since early May, the domestic ferrous scrap market bottomed out in late August and even rebounded in response to the increase in overseas and export prices.

The Kanto tender on September 9 was won with a bid of Yen 51,040 per tonne (US$ 354) for a highest-ever increase from the previous bid of Yen 8979 (US$ 62.35) and surpassing the December 2020 bid by Yen 8105 (US$ 56.28). Accordingly, the export price returned to the Yen 50,000 per tonne level.

Statistics from Japan’s Ministry of Finance reveal that ferrous scrap exports in July amounted to 435,131 tonnes - a total 10.9% lower than that for the previous month and down 27.2% on July last year. Although South Korea has been the leading export buyer for 14 consecutive months, its volumes purchased from Japan fell by 20.2% month on month and 39.3% year on year to 187,919 tonnes in July - the first time in 18 months that the figure had fallen below 200,000 tonnes.

World Steel Association (WSA) statistics for August show that crude steel production among the 64 reporting countries increased by 1.1% from the previous month but was 3% lower than in the same month last year at 150.554 million tonnes. Excluding China, total crude steel production for the 63 other countries reporting to the WSA decreased 1.3% from the previous month and 7% from August 2021 to 66.684 million tonnes. Chinese production increased by 3% from July 2022 and 0.5% from August last year to 83.87 million tonnes, although the total was below 90 million tonnes for the second consecutive month.

According to preliminary data from the Japan Iron and Steel Federation, domestic crude steel production totalled 7,339,200 tonnes in August for a 0.2% increase over July but a decline of 7.4% when compared to the same month last year. As with the very low total of 7,321,000 tonnes recorded in July, the August figure reflects a reduced summer production phase in lieu of power savings.