Negative sentiment has still been prevailing in South Korea’s import scrap market this week. Customers have been looking for lower import prices and have succeeded in getting them for higher grades of Japanese scrap, while new deals for HMS I/II 80:20 and Russian A3 scrap have been concluded after discounts. Meanwhile, South Korean mills have continued to lower their local prices in the current week.
South Korean producer Hyundai Steel has bought a cargo from New Zealand for 16,000 mt of HMS I/II 80:20 scrap at $519/mt CFR. The price is $21/mt lower compared to ex-US deal for the same grade done to Vietnam in the middle of the month and is also lower than the previous offers for HMS I/II at $530-540/mt CFR heard over the past two weeks. Also, the mill has concluded a booking from Russia for 10,000 mt of A3 grade scrap at the same level, which is $4/mt higher than the same steelmakers’ previous bid for ex-Russia material made on November 12.
Also, another South Korean producer SeAH Besteel has bought scrap from Japan this week, with shindachi prices at JPY 65,000/mt ($570/mt) CFR and shredded scrap at JPY 57,000/mt ($450/mt) CFR. These deal prices are both JPY 4,000/mt ($35/mt) below bids made by SeAH and POSCO on November 11-12. Also, these new contract prices are JPY 2,500-3,000/mt ($22-26/mt) below last week’s bids announced by Hyundai Steel. Higher supply from Japan in the higher grade scrap segment has led to a further visible decline in prices, while the tradable level for H2 has been stable at JPY 45,500/mt ($399/mt) FOB for South Korea.
In the local South Korean scrap market, mills have once again decreased their procurement prices. According to a local source, the downtrend of the local market may continue. “I’m not so sure but we are at a definite changing point. The sentiment is half and half. We will have to see who comes out of this debate as the winner,” the source commented. “Well, scrap is still somewhat fluent but demand is not so great because mills have been operating consistently without much maintenance. So, maintenance works have been pushed back towards the end of the year,” he added.
Hyundai Steel cut its domestic scrap prices on November 23. The domestic A weight scrap prices of the producer are at KRW 600,000-615,000/mt ($502-515/mt) at its Incheon, Dangjin and Puhang plants. With the KRW 10,000/mt ($8.36/mt) decrease announced yesterday, Dongkuk Steel’s domestic A weight scrap purchase prices are now in the range of KRW 605,000-620,000/mt ($506-519/mt) in Incheon and Puhang. SeAH Besteel also announced a KRW 10,000/mt ($8.36/mt) decline in its domestic saengchol grade prices this week and its procurement price is now at KRW 669,000/mt ($559/mt).
$1 = JPY 114.02
$1 = KRW 1,195.3