South Korean mills have reduced their bids sharply over the past week for Japanese scrap, while their local scrap market is also softening. As the local scrap flow is strengthening, some players state that S. Korea’s need for import scrap is not urgent as it was. It can easily been seen that Japanese scrap prices are losing strength in the Asian markets, significantly.
On November 11, S. Korean producer Hyundai Steel has bided for Russian A3 scrap at $515/mt CFR, which was $34/mt lower than Dongkuk Steel’s latest deal done on October 29. As a result, the tradable level for ex-US HMS I will be hardly above $520-525/mt CFR in the current conditions, down by $20-25/mt over the week. On the other hand, there are no concrete offers from the US to South Korea this week, market players state that the only offers heard from the US for HMS I/II 80:20 scrap were to Vietnam at $530-540/mt CFR. Last week, US offers to Vietnam were in the range of $550-560/mt CFR.
Meanwhile, POSCO announced its bids on November 11, for Japanese HS grades at JPY 65,500/mt ($574/mt) CFR, which is JPY 3,000/mt ($26/mt) lower than the previous bids on October 29. Also the steelmaker has shared bids for shindachi press scrap at JPY 69,000/mt CFR ($605/mt).
Additionally, SeaAH Besteel’s bids for ex-Japan H2 grade scrap were at JPY 50,500/mt ($443/mt) FOB, while for shredded bids stood at JPY 61,000/mt ($535/mt) FOB. The mill has reportedly concluded some deals for small tonnages from these levels. This price is significantly lower as compared to sellers’ targeted levels for H2 grade at JPY 52,000-53,000/mt FOB and JPY 1,000/mt ($9/mt) down from the previous contract done to S. Korea at JPY 51,500/mt ($452/mt) FOB.
As a result, the SteelOrbis reference price for export H2 scrap from Japan has been lowered to JPY 50,500-53,000/mt ($443-465/mt) FOB from JPY 51,500-54,000/mt FOB earlier this week. The higher end of the range correspond to the targeted sellers’ level only.
It is also observed that South Korean mills are lowering their domestic scrap procurement prices. Hyundai has announced a KRW 15,000/mt ($13/mt) decline in its Incheon, Dangjin and Puhang plants, its prices for weight A scrap is now in the range of KRW 610,000-625,000/mt ($518-530/mt). Dongkuk Steel has also reduced its weight A grade scrap prices by KRW 10,000/mt ($8/mt) in Incheon and Puhang plants to KRW 615,000-645,000/mt ($522-547/mt). Daehan’s reduction was deeper, KRW 15,000/mt to KRW 620,000/mt ($526/mt).
$1 = JPY 114.03
$1 = KRW 1,178.6