The cautious stance of South Korean mills towards import scrap has continued over the past week, while they have reduced their domestic scrap procurement prices once again. As reported before by SteelOrbis, finished steel demand is on the low side in South Korea and is expected to decline further with automobile producers planning a month-long holiday in August. According to Reuters, “South Korean economic growth unexpectedly picked up in the second quarter as strong consumption amid eased Covid-19 restrictions offset poor exports, supporting the case for further central bank interest rate hikes. However, exports and corporate spending on production facilities slumped amid a slowing Chinese economy and the fallout from the war in Ukraine as well as a global wave of monetary policy tightening to fight inflation.”
Having cut its bids for Japanese H2 grade to JPY 40,500/mt ($293/mt) FOB on July 21, Hyundai Steel decided to buy only around 20,000 mt of different grades, including H2 scrap, despite the large tonnages of scrap offered by Japanese suppliers. This tonnage was considered unremarkable by market players. This week Hyundai Steel has not shared bids for Japanese scrap yet.
As of today, July 28, Hyundai Steel’s domestic A weight scrap prices at its Incheon, Dangjin and Pohang plants are at KRW 457,000-485,000/mt ($351-372/mt), similar to Dongkuk Steel’s prices for the same grade. The reduction of the domestic scrap prices of these two producers have reached KRW 40,000/mt ($28/mt) on the lower end and KRW 10,000/mt ($5/mt) on the upper end since July 21.
$1 = KRW 1,302.11