While the uptrend in the Asian scrap market has continued in general, some South Korean producers report that they are ready to take a step back from imports ahead of the Lunar New Year which starts on January 22. The domestic scrap flow in South Korea is still good. There are mixed signals in the market such as lower bids from South Korea for Japanese scrap, increasing FAS-based prices from Japan as well as higher offers coming out of the US. Japanese sources think this is not the peak yet, while a South Korean source reported that their previous orders of deep sea cargoes are sufficient and that sufficient material has been secured for now.
SteelOrbis has learned that the South Korean mill Daehan Steel has shared a bid for Japanese HS scrap at JPY 55,500-56,000/mt ($432-436/mt) CFR, down by JPY 2,000-2,500/mt ($3-7/mt) as compared with POSCO 's bid last week.
As SteelOrbis reported last week, following the Kanto tender, FAS prices translated to JPY 51,932/mt or $393/mt FOB on January 12, and market sources believed that Hyundai Steel’s new H2 bids should be above JPY 50,000/mt FOB. Hyundai Steel skipped bidding for Japanese scrap this week and is expected to stay out of the market during the holiday. The most recent bid from Hyundai Steel for Japanese H2 scrap was announced on December 27 at JPY 49,000 ($366/mt - with the exchange rate at 133.65 to a dollar) FOB.
Kanto Bay FAS-based prices for H2 grade scrap have inched up by JPY 500/mt since yesterday, January 18, to JPY 51,000-52,000/mt ($396-405/mt). This new level signals JPY 52,000-53,000/mt ($405-412/mt) FOB for this grade. HS and shindachi scrap prices in the Kanto Bay area are at JPY 52,500-54,000/mt ($408-420/mt) FAS and JPY 51,500-52,500/mt ($401-408/mt) FAS, respectively.
The SteelOrbis reference prices for ex-Japan H2 scrap have settled at JPY 50,500-52,000/mt ($393-405/mt) FOB, up by JPY 500/mt on the lower end over the past week, mainly amid bullish sentiments among Japanese suppliers, rather than due to support from buyers. Due to the appreciation of the Japanese yen against the US dollar, the changes in prices have resulted in a $15-19/mt increase in dollar-based quotations.
Currently, ex-US HMS I scrap offers to South Korea are at $430/mt CFR and above. Last week, offers for this material were at $425/mt CFR. The most recent deals done by South Korean mills from the US and Australia for HMS I grade were in the range of $410-420/mt CFR in the second half of December.
Another important development has attracted attention in the South Korean market. As SteelOrbis reported on January 13, the Australian Steel Institute (ASI) has reaffirmed its call for a national ban on the export of unprocessed scrap, saying processing scrap locally is an important environmental and economic opportunity for the country. In 2022, South Korea imported four percent of its scrap from Australia. While it seems a small percentage, Australia’s share in South Korea’s import scrap market increased sharply in 2022. Australia only sold 13,162 mt of scrap to South Korea in 2021, while the tonnage in 2022 is estimated at around 145,000 mt.
$1 = JPY 128,58