The uptrend of South Korean mills’ scrap procurement prices has continued, both in the import and domestic segments. Interest in ex-US scrap has been seen in the country, while importers are still in negotiations with Japanese sellers, who have become more bullish after the Kanto tender.
SteelOrbis has learned that POSCO concluded a deal from the US for 40,000 mt of HMS I scrap at the end of September, with the price recorded at $515/mt CFR, for November shipment. As POSCO’s contract is relatively old, it is safe to say that closing another ex-US booking at a similar level seems impossible. Market players recall that their assessments last week for HMS I scrap from ex-US West Coast to South Korea were at $505-510/mt CFR. Currently, the indicative price level for ex-US bulk HMS I is at $520-525/mt CFR.
Other S. Korean mills are still in negotiations with Japanese suppliers. Though Hyundai Steel was expected to close its tender today, no results have been reported so far. Japanese exporters have started to ask for JPY 54,000/mt ($476/mt) FOB at the lowest for H2 scrap now after the Kanto tender. Last week, the tradable level for ex-Japan H2 to South Korea was at JPY 52,000-52,500/mt FOB. Though the current offers in the Japanese currency have increased strongly, due to the fluctuations in the exchange rates the US dollar price level posted a minimal increase of not above $5/mt. Market sources expect to see new deals for ex-Japan scrap to S. Korea at higher levels by the end of this week.
Several South Korean producers have announced rises in their local scrap procurement prices, though one player stated that even these adjustments may not be enough to secure the needed tonnages, and so further increases may be observed in the local scrap market in the coming days. On October 11, SeAH Besteel and Dongkuk Steel both increased their domestic scrap prices by KRW 10,000/mt ($8.39/mt). As a result, SeAH Besteel’s saengchol grade scrap prices are now at KRW 634,000/mt ($532/mt), while Dongkuk’s heavy A grade scrap prices at its Incheon and Pohang plants are at KRW 570,000/mt ($478/mt) and KRW 590,000/mt ($495/mt), respectively. On October 13, SeAH Changwon Special Steel also announced a KRW 10,000/mt ($8.39/mt) increase in its domestic scrap prices.
$1 = KRW 1,191.38