S. Korea active in ex-Russia and ex-Japan scrap purchases, prices up again

Thursday, 14 October 2021 15:43:15 (GMT+3)   |   Istanbul

South Korean mills have continued to raise their import scrap prices with deals concluded from Russia and Japan.

SteelOrbis has learned that Dongkuk Steel has bought 27,000 mt of Russian A3 grade scrap at $534/mt CFR. This price is much higher than both previous price levels in negotiations for ex-US scrap and in the previous sale from Russia. The previous ex-Russia deal by a South Korean mill was also done by Dongkuk Steel, at $483/mt CFR in late September.

Just before this ex-Russia scrap sale, there was information about a purchase of ex-Australia HMS I by one South Korean mill at $522.5/mt CFR, but this level is not available any more. Suppliers from the US are going to target not less than $545/mt CFR in South Korea in the next round of sales, taking into account the Russian sale.

One of the reasons for the sharp increase in ex-Russia and ex-US scrap prices has been the strong uptrend seen in Japan. And though demand for the lower grade ex-Japan scrap from S. Korea has been not very high, a number of new deals have been reported in the market at increased prices.

Hyundai Steel has announced bids for Japanese scrap today, October 14. Its bid for H2 grade is at JPY 52,000/mt ($458.7/mt) FOB, and, though it is much higher than the company’s previous official price voiced in the middle of September, this price is in line with the lowest deal price level to S. Korea for this grade last week. For other scrap grades, the price increase has been more obvious. Hyundai Steel’s shredded scrap bid was at JPY 60,000/mt ($529.3/mt) FOB, up by JPY 1,500/mt ($13/mt) compared to a contract to another customer last week.

Additionally, the producer’s purchase prices for HS grades are now at JPY 61,000/mt ($538.2/mt) FOB, while shindachi bara prices are at JPY 67,000/mt ($591/mt) FOB.

In addition, SeAH Besteel has concluded a contract from Japan for shredded scrap at JPY 65,000/mt ($573.5/mt) CFR. This price is JPY 2,500/mt ($22/mt) higher than the mills’ prices recorded last week.

Another South Korean steelmaker Daehan has bid for Japanese H1/H2 50:50 scrap at JPY 57,500/mt ($507/mt) CFR, SteelOrbis understands, up by JPY 600/mt ($6/mt) from the deal price level a week before.

This means that the demand for higher grade scrap in S. Korea is still stronger, which pushes prices up at faster pace in comparison to H2 scrap. The tradable level for ex-Japan H2 scrap in S. Korea is standing at JPY 52,000-53,000/mt ($458-467/mt) FOB, remaining almost stable from last week.

On the other side, South Korean mills are still increasing their domestic scrap prices. Hyundai has announced a rise after SeAh Besteel and Dongkuk Steel, stating that local scrap procurement quotations will be raised at its Incheon, Dangjin and Pohang plants by KRW 10,000/mt ($8.43/mt) to KRW 570,000-585,000/mt ($481-493/mt) for heavy A grade scrap. It is important to mention that the strike at Hyundai’s Dangjin plant is over as well as the maintenance works at its Incheon plant.

$1 = JPY 113.4
$1 = KRW 1,185.9

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