South Korean producer POSCO has announced bids for Japanese scrap after a month of absence from the market. Still being the sole scrap importer currently active in South Korea, POSCO has cuts its prices this week for Japanese scrap. South Korean sources report that domestic mills have been increasing their local scrap purchase prices in May “two or three times depending on the mill because the flow was very slow”, as one source stated. US scrap is not considered an option by South Korean producers, most of whom believe Japanese and Russian scrap to be more attractive at the moment.
POSCO has shared bids for Japanese HS grade scrap at JPY 47,000/mt ($328/mt) CFR, down JPY 500/mt month on month. Due to the fluctuating Japanese yen-US dollar exchange rate, dollar-based prices have decreased by $3/mt over this period. The producer’s offers for shindachi grade scrap are now at JPY 46,000/mt CFR or $320/mt CFR, also moving down, by JPY 500/mt or $4/mt.
POSCO has kept its bids for Japanese shredded scrap stable at JPY 46,500/mt ($320/mt) CFR. The JPY 46,500/mt level indicates FOB-based prices for Japanese shredded scrap are at around JPY 44,000/mt or $307/mt, with freight between South Korea and Japan being around JPY 2,500/mt.
Considering the gap between ex-Japan shredded and H2 scrap prices at around JPY 3,000-4,000/mt, this means indications for ex-Japan H2 prices for South Korea are at JPY 40,000-41,000/mt FOB or $278-286/mt FOB.
$1 = JPY 143.37