Both in the import and domestic scrap markets, South Korean mills are starting to hit the brake on price increases.
Dongkuk Steel has concluded an ex-US booking for 30,000 mt of HMS I scrap at $542/mt CFR which is lower than the indications at $550/mt CFR last week. However, the ex-US cargoes are usually $10/mt higher priced than the Russian quotations and this deal was considered to signal that import scrap prices in South Korea have peaked.
Dongkuk Steel has also concluded an ex-Russian transaction for 40,000 mt of A3 grade scrap at $549/mt CFR. The previous Russian cargo was closed at $534/mt CFR two weeks ago. A market player states that US suppliers prefer other Southeast Asian destinations that are paying higher quotations for ex-US scrap, hence against the high levels of Japanese scrap, South Korean producers are focusing on Russian materials.
Meanwhile, POSCO reduced its bids for Japanese shredded and HS grade scrap by JPY 2,500/mt ($22/mt) and JPY 10,000/mt ($88/mt) to JPY 65,500/mt CFR ($577/mt) and JPY 68,500/mt ($603/mt) CFR. This is the first decrease announced by POSCO for Japanese scrap over the past two months.
Local South Korean scrap market has continued to move up in the current week. On October 25 and 26, Hyundai Steel has increased its prices by KRW 20,000/mt ($17/mt) and KRW 15,000/mt ($13/mt) on all three plants to KRW 625,000-640,000/mt ($534-547/mt) for weight A scrap. A similar price increase for domestic weight A grade scrap is observed for Dongkuk Steel and Daehan Steel.
$1 = JPY 113.5
$1 = KRW 1,169