Local scrap prices in South Korea have increased lately and market sources believe that trading activity in the import segment will increase later this week, with bids also expected to rise.
The latest deals for ex-Japan scrap have been mainly at firm prices. POSCO issued its bid for ex-Japan HS scrap at JPY 58,000/mt ($502/mt) CFR last Friday, almost in line with the deal signed by Hyundai Steel on December 23.
No new deals have been reported for H2 grade, but the prices are expected to be at least JPY 49,000/mt ($429/mt) FOB after the market becomes more active, taking into account the still much higher prices in the local market in Japan and new deals done to Vietnam at $485-490/mt CFR, which is equivalent to around JPY 50,000/mt ($433/mt) FOB. Hyundai Steel’s bid for H2 was at just JPY 47,000/mt FOB in late December.
Market sources are waiting for the Kanto tender results on December 12, indicating that the uptrend will be clearer after the tender.
Following a domestic scrap purchase price increase announced by the majority of South Korean mills late last week at KRW 15,000-20,000/mt ($12-17/mt), today three producers (Dongkuk, Daehan and YK Steel) have announced a further increase for all grades by KRW 15,000/mt ($12/mt) from December 11.
The SteelOrbis reference price for ex-Japan H2 scrap has been increased to JPY 49,000-50,000/mt ($411-428/mt) FOB, up by JPY 2,000/mt ($17/mt) on the lower end and up JPY 1,000/mt ($9/mt) on the upper end of the range, compared to late December.