Domestic SUS304 markets ? Voices from the market with higher prices caused by lack of materials

2016/04/12

@As the Japanese yen has got obviously stronger than in March and nickel prices remains between $8,300-8,500, SUS304 scrap prices are considered to be declining in terms of theoretical value. However, tensions persist in the domestic market where the shortage of materials has kept the prices at a higher level. The current market prices are not likely to drop at all with special steel manufacturersf purchases at higher prices.

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@The current market prices in Kansai region, where the SUS304 prices are at the highest in the world, are around JPY110-115 per kilo ex yard, which is can be seen mainly in the materials for Sanyo Special Steel. For other exporter, trading companies and JSP, the prices at that level are the highest ones delivered (Even so, as their prices delivered are around JPY110, the price difference between Sanyo and others than Sanyo is JPY5-10.)
@The difference in prices has continued since mid-February when NSSC lowered the SUS304 scrap purchasing price by JPY10 to the level of JPY100.

@Also, as some materials are sent to Himeji from Kanto region, the prices in Kanto region are moving closer to the level of Kansai region. The flows to NYK, an exporter and JSP(Koyama) in Kanto region are decreasing on the whole.

@Although major stainless steel manufacturers realize this situation, they are not pursuing higher prices. Rather, they are thinking of lowering the purchasing price with the current nickel price and the Japanese yen rate, but it would be difficult under the current situation.

@NSSC may be considering that they donft need to struggle for gathering materials as they have a periodical furnace repairs in May. But, the distributors for NSSC and JSP have been suffered from the decreased collection lately.
@And, Nisshin Steel had already decided to keep the SUS304 scrap purchasing price at the same level as previous month. It might be partly because of its low scrap ratio. The company is also planning to have a periodical furnace repairs in May.

@They are getting more frustrated with manufacturers who take time to correspond to the prices. A stainless steel scrap dealer for Kansai and Chubu region complained, gWe canft purchase materials as manufacturersf purchasing prices are too low. We canft get the materials losing in purchsing. We want them to set a realistic price.h
@And, gIf we can purchase the materials, itfs difficult to maintain business. The lack of scrap generation has impacted directly on our business. We are in a dangerous situation. We really want manufacturers to understand the situation.h

@There are not a few criticisms offered to the purchasing way of special steel manufacturers.
@gIt could be acceptable if they offered the price only to the local dealers or limited dealers, but they are offering the price at random. So, it pushes the price at a higher level in the market. Contrary to this, N mill in Hokkaido purchases scraps only from the dealers in Hokkaido. Itfs quite reasonable,h a scrap dealer in Kansai region said.

@However, there would be no choice for them (=Sanyo Special Steel) to purchase scraps at higher prices as they had to increase production instead of Aichi Steel and most of the raw materials they use are scraps.

@The situation could have been different if the prices are at much higher levels such as JPY300 or JPY400. As the scrap generation has been decreasing year by year, the high price caused by lack of materials make things hard although the price level is lower compared to the market levels of less than JPY150 in the past years.

@Considering the SUS304 theoretical value based on LME nickel prices and exchange rate, JPY120 plus something extra is rather expensive. However, price differences of JPY5-10 have been evidently seen between Sanyo and the largest NSSC (and JSP).
@Many sources are claiming in the market, gManufacturers would never go out of business if they purchase the materials temporarily at a bit higher price. But, the scrap dealers might go bankrupt due to low trading and money losing shipment in this situation. Thinking to maintain the distribution network, we would like them to understand the difficulties in the market.h

@How can dealers and manufacturers overcome this difficult situation? They are entering a crucial stage.

iEdited by Sasakij

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