South Korean mills are relaxed in terms of scrap imports amid their healthy inventory levels of scrap, slower rebar sales and maintenance works. “As finished steel demand in Asia is significantly slower nowadays, demand for scrap is also not that great,” a source commented. Under the current circumstances, S. Korean producers are still exerting pressure on Japanese scrap prices, while they do not consider accepting high-priced offers from the US segment, leaning on alternative suppliers from time to time. “S. Korean mills’ inventory levels for rebar str also very high, hence they are not willing to purchase scrap before making some sales,” another player commented.
As compared to the levels announced on December 2, Hyundai Steel reduced its bid for H2 grade by JPY 500/mt ($4.4/mt) to JPY 47,000/mt ($413/mt) FOB. Previously, Japanese sellers accepted Hyundai’s low bids announced last week at JPY 47,500/mt ($417/mt) FOB, but sold very small tonnages to South Korea. The tonnage was 10,000 mt in total, and 5,000 mt of the cargo was reportedly H2 grade scrap. The volume that has been secured at the new bids has not been disclosed. “There is a small space left for a decrease for Japanese scrap, maybe even a stabilization is possible for Japanese prices for South Korea,” a source commented.
Producer’s bids for shredded scrap from Hyundai are now JPY 500/mt ($4.4/mt) lower as compared to December 2 at JPY 52,500/mt FOB ($461/mt).
While Hyundai’s bids for HS scrap have moved down by JPY 500/mt ($4.4/mt) to JPY 55,500/mt ($488/mt) FOB, their bids for shindachi bara have been reduced by JPY 2,000/mt ($17.5/mt) to JPY 58,000/mt ($510/mt) FOB. This has signaled oversupply in the high grade scrap segment.
Additionally, this week, SeaAh Besteel’s bids for shindachi have been released at JPY 62,500/mt ($549/mt) CFR, JPY 1,500/mt ($13/mt) lower than last week. POSCO’s bids for Japanese shindachi press are at JPY 63,000/mt ($554/mt) CFR, which is JPY 1,000/mt ($8.7/mt) lower than SeaAh Besteel’s bids announced last week. With the JPY 4,000/mt ($35/mt) freight, SeaAh Besteel’s and POSCO’s bids are at JPY 58,500/mt ($514/mt) FOB and JPY 59,000/mt ($519/mt) FOB, respectively.
For the US scrap segment, market players state that domestic scrap flow in South Korea is still strong and inventories of producers are healthy, and so they are unwilling to accept US sellers’ higher prices right now. “There is no interest,” a source commented.
As mentioned before, domestic scrap prices are also softening under the current conditions. Hyundai Steel cut its domestic scrap prices by KRW 10,000/mt ($8.5/mt) on December 7, as SteelOrbis reported the announcement last week. The domestic A weight scrap prices of the producer at its Pohang, Incheon and Dangjin plants are now at KRW 590,000-605,000/mt ($500-512/mt). Dongkuk Steel’s prices at its Incheon and Pohang plant have also been revised downwards by KRW 10,000/mt ($8.5/mt) week on week to KRW 595,000-610,000/mt ($504-517/mt). Similarly, Daehan and YK Steel’s prices have been reduced for the same grade to KRW 600,000/mt ($508/mt) week on week.
$1 = JPY 113.7
$1 = KRW 1,180.9
