Japanese domestic SUS304 stainless scrap market updates, with mixture of bullish and bearish sentiments
Despite the sharp decline in nickel price, Japanese domestic SUS304 series scrap markets is keeping an upward trend because Korean POSCO early decided to raise their purchase price for June. Current market prices of SUS304 series solid scrap are around 140-145JPY/kg edging up to 150JPY/kg.
Before the POSCOfs price for June was reported, Daido Steel had raised their purchase price of scrap by 5yen/kg after cutting it. Also, Nippon Yakin Kogyo in Kanto region had raised it by more than 5yen/kg for some dealers (the scrap delivered prices were around 150-155yen/kg). So, the upward trend had been built below the surface. But, POSCOfs rising of purchase price suddenly made the market atmosphere bullish. Japanese domestic SUS304 series scrap market is coming to the most important stage of this year.
gThey may have increased their scrap purchase due to failure in purchase of ferronickel. Or, they may have taken the measure for increased production. Or, scrap needs may have increased due to price rise in NPI at Zhangjiagang plant in China. At any rate, the decision was made too earlyh, said a source from Japanese stainless manufacturer.
Also, some sources pointed out, gAs POSCO has been investigated by prosecutors for its subsidiaryfs scandal, the price rise may have conducted by the confused executives.h POSCO announced to launch an emergency management reform committee to recover its corporate image and public confidence.
POSCOfs purchase price rise seems to have boosted an upward trend of actual market price at that time.
gNow would be the crucial point of this year. If neither Nisshin nor NSSC moves, significant amount of scrap would be exportedh, said a stainless scrap dealer. In fact, the supply of stainless steel for Nisshin Steel, which is said to purchase scrap at the lowest price in Japan has dropped sharply. While Nisshinfs scrap demand has decreased compared to usual months due to the maintenance of furnaces, without an extreme reduction of production, they would be out of stock unless they set their purchase price consistent with the actual market price.
However, LME nickel price dropped below $13,000/t as of 20 May, reaching the low in April again at the moment. Rising scrap price under such a situation will inevitably lead to less consistent and paradoxical price setting. So, in order to get scrap materials for sure, price negotiation under the surface or sober and bold purchase will be played out.