October 11, 2008

Japanese scrap prices at record levels as demand soars

Bloomberg reported that Japanese scrap iron and steel prices rose to a record for a fifth consecutive week as demand from Japanese, South Korean and Chinese steelmakers rose and a drop in building demolitions reduced the supply of reclaimed girders.

Japan Ferrous Raw Materials Association said that the average cost of H2 grade ferrous scrap jumped by 3.6% to an all time high of JPY 46,297 per tonne this week. It added that rising steel demand from shipyards and carmakers in China and South Korea has pushed up prices of scrap, which steelmakers use to replace some or all of the iron ore and coking coal used to make the alloy.

Mills are using more scrap amid soaring prices for raw materials while a stricter building code started last year in Japan has choked the supply of used steel from buildings knocked down to make way for new ones.