The price in Japan for nickel alloyed stainless steel scraps (new clippings) rose to JPY 125,000 per tonne, delivered to mills' yard, from JPY 120,000 per tonne, the latest price quoted by the mills for December deliveries. The SUS mills had withheld announcing their prices for January during the first week of January in order to watch the market, but finally quoted JPY 125,000 per tonne earlier this week.

 

The price of imported SUS scraps has risen in yen due to (i) the sharply weakened yen currency to JPY 89 and (ii) the firm increase in the price in USD for "Sabot" (solid 18-8 SUS scraps), by which the prices of domestically generated scraps have been unavoidably affected.

 

Although the demand from Japan's domestic scrap consumers are not yet brisk, it is rumored that POSCO (Korea) are to start aggressive buys for arrival during March, making the scrap price for export from Japan rise to an equivalent to USD 1,700 per tonne CIF China level, which is an increase of nearly USD 100 per tonne from the price of one months ago. This means that the Japanese mills will need to reconsider their scrap buying strategy so that they can secure the tonnage for their spot need. They may fail to buy enough if they continue to be passive in fresh buys simply because there is only a little demand, and unless they try to catch up with the current situation.

 

The buying price of a major scrap exporter is said already JPY 135,000 to JPY 140,000 per ton delivered to the buyer's yard, indicating a big gap from the mills' quoted price. Therefore it is likely that more cargoes will be directed to exports for higher-priced sales, unless the gap is somehow narrowed.