While South Korean mills continue to maintain a mostly cautious stance against imports, Hyundai Steel has decided to bid for Japanese scrap after the break it took from imports. It is known that South Korean producers are procuring most of their scrap needs from their domestic market and have little incentive to import scrap as economic and trade-related outlooks are not so great in the region. According to one source, “South Korean steelmakers have decreased their domestic scrap prices by about $80-90/mt within two weeks since early July due to the gloomy product market outlook. And it is likely to continue a little longer with not much hope for a rebound. Most mills are unwilling to take the risk of buying imported scrap due to high inventories, the negative product market, and good domestic scrap flow with a high possibility of decreasing prices.”
As compared to the levels announced on June 9, Hyundai Steel has decreased its bid for Japanese H2 grade by a mere JPY 12,500/mt to JPY 40,500/mt ($293/mt) FOB, but the depreciation of the Japanese yen has had a big impact on dollar-based quotations, resulting in a $103/mt decline.
As compared to June 9, Hyundai Steel’s bids for HS scrap have moved down by JPY 12,500/mt or $104/mt to JPY 45,000/mt ($326/mt) FOB. Hyundai Steel’s bids for shindachi scrap are also at JPY 45,000/mt ($326/mt) FOB, significantly cheaper than SeAh Besteel’s purchase of shindachi scrap at JPY 53,000-53,500/mt ($386-389/mt) FOB reported a week ago.
Finally, Hyundai Steel bid JPY 41,000/mt ($297/mt) FOB and JPY 41,500/mt ($300/mt) FOB for H1/2 and H1 grades respectively.
No offer from the US West Coast for bulk HMS I scrap was given to South Korea this week.
As of today, July 21, Hyundai Steel’s domestic A weight scrap prices at its Incheon, Dangjin and Pohang plants are at KRW 497,000-495,000/mt ($379-377/mt), similar to Dongkuk Steel’s prices for the same grade. The decrease in domestic scrap prices of these two producers has reached KRW 30,000/mt ($16-24/mt) since July 11.
$1 = JPY 138.24
$1 = KRW 1,311.77