South Korean producer Hyundai Steel has reduced its bids for the Japanese scrap market after a previous announcement of an increase on March 10. This week, a South Korean source reported that the mood in the country has turned sour once again. “The market is definitely softer and a few US-based suppliers were asking if we were willing to purchase cargoes for April-May shipment with price indications lower than last week,” the source commented. South Korea’s import scrap market is expected to soften further in the coming days. While domestic scrap prices have moved up a little in Youngnam, in other regions they have remained stable. Domestic scrap flow is still healthy in South Korea, supporting local mills, while the pessimistic mood causes domestic scrap suppliers to avoid taking risks, “selling whatever they are buying to producers,” as one source remarked. A Japanese source commented that the Japanese market will also have some room to decline due to the weaker US dollar.
SteelOrbis has learned that Hyundai Steel has shared a bid for Japanese H2 grade scrap at JPY 52,300/mt ($401/mt) FOB. The previous bid from Hyundai Steel for Japanese H2 scrap was announced on March 10 at JPY 54,000 ($396/mt - with the exchange rate at 136.41 to the dollar) FOB. Despite the cut in Hyundai Steel’s bid, given the fluctuation of the exchange rate, its bid has indicated a $5/mt increase on dollar basis.
Today, Tokyo Steel, the leading EAF-based steel producer in Japan, has announced the second cut in its local scrap purchase prices this week, with its H2 grade scrap price moving down to JPY 52,000-54,000/mt ($399-414/mt), depending on the mill.
As a result, the SteelOrbis reference price for ex-Japan H2 scrap has moved from JPY 54,000-56,500/mt ($396-414/mt) FOB to JPY 52,300-54,500/mt ($401-418/mt) FOB. The lower end is now represented by Hyundai Steel’s most recent bid today, with the upper end of the range represented by the Tokyo Bay prices.
Hyundai Steel has also released bids for HS scrap at JPY 56,300/mt ($432/mt) FOB, down by JPY 700/mt, but up by $4/mt on US dollar basis, as compared to the levels on March 10.
Meanwhile, Hyundai Steel’s bid for HMS I/II 50:50 scrap stands at JPY 52,800/mt ($405/mt) FOB, down JPY 1,700/mt but up by $5/mt as compared to the previous bid.
This week, offers for ex-US bulk HMS I/II 80:20 scrap to South Korea stand at $450-460/mt CFR, down from the indications recorded last week at $470/mt CFR. Freight between South Korea and the US is currently $30-35/mt. However, South Korea is not in a rush to conclude ex-US scrap bookings, SteelOrbis hears.
$1 = JPY 130.29