South Korean mills are raising their domestic scrap procurement prices, while they also offer higher levels for Japanese scrap. This is a policy maintained to secure the tonnages they need, though steel demand is not recovered much in South Korea. A source from a major South Korean mill commented that “an increase in finished steel prices is unlikely but now we at least think there is a small possibility.” The increases in the South Korean local market is considered to be only the start. “Gap between import scrap and domestic is still too big, and domestic suppliers definitely want more,” the source added. Therefore, the rising trend in South Korean scrap market is expected to continue, at least until the four day Choosuk holiday to start on September 9.
As compared to the levels announced on August 18, Hyundai Steel has increased its bid for Japanese H2 grade by JPY 3,500/mt to JPY 46,000/mt ($335/mt) FOB, dollar-based quotations moved up by another $21/mt. Last week, Hyundai Steel has increased its bid for Japanese H2 grade at JPY 42,500/mt ($314/mt) FOB and SteelOrbis has learned that Hyundai bought 20,000 mt of scrap from the levels announced last week.
As compared to August 18, Hyundai’s bids for HS scrap have risen by JPY 4,000/mt or $24/mt to JPY 52,000/mt ($379/mt) FOB. Hyundai did not share any bids for shindachi bara scrap this week, having announced its bids at JPY 48,000/mt ($355/mt) FOB last week.
Finally the steel mill raised its bid for shredded scrap by JPY 4,000/mt or $23/mt to JPY 51,000/mt ($371/mt) FOB.
SteelOrbis has learned that bulk HMS I scrap offers from the US West Coast given to South Korea are at $400-410/mt CFR, indicating a $15/mt increase in prices as compared to the ones shared on August 18. This price level is considered to be high and not competitive against both local and import scraps from other regions.
As anticipated by SteelOrbis last week, South Korean mills started to increase their domestic scrap procurement prices. As of today, August 24, Hyundai Steel’s domestic A weight scrap prices in its Incheon, Dangjin and Pohang plants are at KRW 457,000-475,000/mt ($341-354/mt), up by KRW 20,000/mt ($10/mt) week on week. Another S. Korean mill Dongkuk Steel’s prices for the same grade have also increased by KRW 20,000/mt ($10/mt) over the past week to KRW 457,000-475,000/mt ($341-354/mt). South Korean mills still have room to increase their domestic scrap quotations in the coming weeks.
*Exchange rate fluctuations are taken into consideration when calculating the dollar-based price changes.
$1 = KRW 1,340.56
$1 = JPY 137.35