South Korea’s Hyundai Steel has announced its fresh bids for ex-Japan scrap today, January 28, which are about JPY 1,500/mt ($14/mt) below the contract made by another Korean mill earlier this week. Moreover, in comparison with last week the pace of the price fall for higher quality scrap has exceeded that for H2, signalling weakening demand and a negative outlook for the near future.
Hyundai Steel has issued a bid for H2 scrap at JPY 35,000/mt ($336/mt) FOB, down by JPY 4,500/mt ($43/mt) compared to the company’s price a week ago. Just yesterday, there were reports of a purchase by Dongkuk Steel of the same grade scrap at JPY 36,400-36,500/mt ($349-350/mt) FOB. Lower bids from Hyundai Steel have put further pressure on the general price range from Japan.
Moreover, new bids for higher grade scrap have posted an even bigger decline. For instance, HS and shredded scrap bids have fallen by JPY 5,000/mt ($48/mt) since last week to JPY 39,000/mt ($374/mt) FOB. Hyundai Steel has been asking the same price of JPY 39,000/mt ($374/mt) FOB for shindachi too, so the price has plunged by JPY 6,000/mt ($57/mt) week on week.
Japanese suppliers will try to redirect some volumes to some other Asian countries, where bids could be higher, but, according to sources, this will be hard. Chinese customers may follow the move by Hyundai Steel and cut their bids for HS scrap to as low as $400-410/mt CFR compared to the tradable value at $450/mt CFR reported by SteelOrbis earlier this week.
The SteelOrbis reference price for ex-Japan H2 scrap has come to JPY 35,000-38,000/mt ($336-364/mt) FOB, down by JPY 1,000/mt ($10/mt) from yesterday and down by JPY 3,750/mt ($36) since last week.