As domestic scrap prices are currently more attractive for South Korean steel mills, it is observed that they are focusing on procuring scrap from their local scrap market by increasing their prices. At the same time, sharp price rises are seen on the import side and one producer has had to pay for Japanese scrap a price which is $18/mt higher than last week.
Price indications for HMS I scrap ex-US West Coast to South Korea are currently at $505-510/mt CFR, market sources report. But considering that the US cargo was reportedly sold to Vietnam at up to $525/mt CFR for HMS I/II 80:20 scrap, players believe that this was a good sale for the US side, but that this level is not workable right now for South Korea.
South Korean mill SeAH is reported to have bought ex-Japan shredded scrap at JPY 62,500/mt ($561/mt) CFR, which is up JPY 2,000/mt ($18/mt) compared to a contract signed for the same grade last week. But players state that the tonnages in question were not high.
Meanwhile, there has been information in the market that South Korean buyers have been in negotiations for Japanese H2 grade scrap at JPY 52,000/mt ($467/mt) FOB, though no deal has been confirmed at this level by the time of publication since domestic demand in Japan is supporting local scrap quotations, leaving little room for international buyers. Offers for H2 mainly start from JPY 53,000/mt ($475/mt) FOB.
With domestic scrap prices in South Korea more attractive than import prices, some South Korean mills have increased their procurement prices this week to maintain scrap flow. SteelOrbis has learned that Hyundai Steel has decided to increase its local scrap purchase prices in Incheaon, Dangjin and Pohang plants from October 8 by KRW 10,000/mt ($8.4/mt). As a result, local prices of the mill will settle at KRW 560,000/mt ($471/mt) for Incheon-Dangjin and KRW 575,000/mt ($483/mt) for Pohang. Daehan Steel and Dongkuk Steel (Pohang plant) were not the exceptions, with the producers increasing their domestic scrap prices on October 5 and 6 consecutively by KRW 10,000/mt ($8.4/mt) to KRW 570,000/mt ($479/mt) and KRW 580,000/mt ($487/mt), respectively. All prices in question are for A weight scrap.
POSCO also made a similar move, announcing a price rise for the Gwangyang and Pohang plants of KRW 10,000/mt ($8.4/mt).