In 2022, the ferrous scrap market hit its highest level since 2008, strongly influenced by the surge in resource and energy prices caused by the Ukraine conflict. In addition, the depreciation of the yen to its lowest level against the US dollar in some 32 years resulted in domestic ferrous scrap prices remaining at very high levels.
On January 12 this year, the Kanto tender was won with a bid of Yen 50,932 per tonne (US$ 388.80) for a total of 11,000 tonnes. The export price increased by Yen 3364 per tonne (US$ 25.68) from December and, for the first time in four months, the successful bid exceeded Yen 50,000 (US$ 381.68) following a slump in November.
According to the Ministry of Finance’s trade statistics, Japanese ferrous scrap exports amounted to 6.307 million tonnes in 2022 for a decline of 13.6% from the previous year; this was the first time the annual total had fallen below 7 million tonnes since the 5.442 million tonnes recorded in 2011. Along with a slowing global economy, Vietnam’s significant steel production cuts had a particularly strong impact on exports from Japan.
A preliminary report from the Japan Iron and Steel Federation indicates that domestic crude steel production totalled 89.235 million tonnes last year for a decline of 7.4% compared to 2021 but still ahead of the 83.186 million tonnes recorded in 2020 when output was severely affected by the first wave of the COVID crisis. In December last year, Japan’s crude steel production fell by 3.8% when compared to the previous month and by 13.1% versus the same month in 2021 to 6.899 million tonnes - the twelfth time in succession that the total was below that of the corresponding month of the previous year.