South Korean steel producer POSCO has remained the only buyer of Japanese scrap in South Korea. Market sources report that its fellow South Korean steelmaker Dongkuk Steel has even announced a break from local scrap purchases between February 10 and March 4 for its Pohang plant, with the producer expected to start major maintenance works in the plant. Meanwhile, Hyundai Steel’s announcement of plant closures and its decision to cut production capacity utilization rates further means that it will not resume scrap imports soon. Hyundai Steel plans to suspend operations at its Incheon No. 2 rebar plant on January 13-27 and at its rebar plant in Pohang on January 22-31 due to the sluggishness of the construction industry in South Korea, market sources report.
POSCO has shared bids for Japanese HS grade scrap at JPY 49,000/mt ($312/mt) CFR, stable week on week. Due to the fluctuation of the Japanese yen against the US dollar, the dollar-based price has increased by $2/mt over this period. The producer’s offers for shindachi grade scrap are still at JPY 49,000/mt CFR or $312/mt CFR, also moving up by $2/mt.
POSCO has also shared bids for Japanese shredded scrap at a stable level of JPY 48,000/mt ($308/mt) CFR. The JPY 48,000/mt price indicates FOB-based prices for Japanese shredded scrap are at around JPY 45,000/mt or $289/mt with freight between South Korea and Japan being at around JPY 3,000/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 41,000-42,000/mt FOB or $263-270/mt FOB.
Meanwhile, Tokyo Bay FAS-based prices for H2 grade scrap are currently at JPY 40,000/mt ($256/mt), with the dollar-based price up $1/mt week on week. This level shows that FOB prices are now at JPY 41,000/mt ($263/mt) for this grade.
Tokyo Bay HS grade scrap prices now stand at JPY 45,500/mt ($292/mt) FAS, $2/mt higher week on week. During the past week, shindachi scrap quotations have declined by JPY 500/mt since last week to JPY 44,500/mt ($286/mt) FAS.
$1 = JPY 155.77