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Japanese stainless scrap prices weaken

It is reported that domestic price of nickel-based stainless steel scrap in Japan are being shaken by a fall of nickel price. An atmosphere of the scrap market in this week has completely changed in comparison with that in last week.

Stainless steel companies in Japan have decided on the beginning of May a reduction of JPY 20,000 per tonne for price of nickel based stainless steel scrap and aimed to purchase this scrap at JPY 210,000 per tonne delivered to mills. However, stainless steel mills in Japan have already determined to operate their facilities on a full scale until June and, in view of the difficulties to secure actual cargoes of stainless steel scrap as required, some of stainless steel mills have sporadically purchased nickel based stainless steel scrap at the prices, which have rectified its too low levels and revised by a certain rise. Reflecting this movement in the scrap market, dealers in Kanto area have risen on the end of last week their prices to collect nickel based stainless steel scrap by JPY 20,000 per tonne.

However, the market price of this scrap has drastically changed further. LME nickel price at the 17th of May fell considerably and, accordingly, price of nickel-based stainless steel scrap has trended to fall further on a basic tone. LME nickel price at the 17th of May had fallen to USD 9.548 per lb having broken the level of USD 10 per lb and a feeling of the opaqueness is multiplying until the time, when an anxiety for the monetary market in Europe in the future has calmed down and a certain prospect of the financial market has been forecasted. The market price of nickel metal has been viewed to be USD 20,000 per tonne as a temporary border line and the fluctuation of nickel price has become a tide to influence on production of stainless steel.

The dealers concerned in export of stainless steel scrap from Japan have taken a severe attitude to purchase this scrap. It was informed that, as symbolized by a slump of the exports for China at present, exporters in Kyushu area have reduced from the beginning of this week their purchase prices of nickel-based stainless steel scrap by JPY 40,000 per tonne.

On the other hand, as regards exports of stainless steel products from Japan, reflecting a sharp fall of LME nickel price by 20% from the higher level prevailed in April, stockiest have taken an attitude to hold back new orders for stainless steel products and, therefore, the negotiations to export stainless steel products from Japan have stopped from the beginning of May. If this aspect would continue for a long period, the production of stainless steel in Japan from July and afterwards should have a possibility to be influenced substantially. A steep fall of nickel price has brought in various influences on many markets.

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